siavosh

Just adding to beatthecfa's comments.

Since it is accounting, you can take it as mathematics.
1. Go by basic equation A = L + E.
2. After revaluation, value of your Asset (A) has gone up.
3. In order to balance your equation, you either have to increase L or E.
4. There is no case for increase in L here, so it is logical your Equity (E) will increase.
5. Now E could increase either thru increase in Net Income (NI) or by increasing your 'Other Comprehensive Income' component.
6. Since, increase in Asset value after revaluation is not a case/component for 'Other Comprehensive Income', your increase in Equity has to come from NI/Profitability from Income Statement for that Period.
7. So, any revaluation of your Asset will affect your Profitability for that period. Upward evaluation to be reported as a Gain and Impairment to be reported as a Loss in your Income Statement for that period.