The revaluation surplus included in equity in respect of an item of property, plant and equipment may be
transferred directly to retained earnings when the asset is derecognised. This may involve transferring the
whole of the surplus when the asset is retired or disposed of. However, some of the surplus may be
transferred as the asset is used by an entity. In such a case, the amount of the surplus transferred would be the
difference between depreciation based on the revalued carrying amount of the asset and depreciation based
on the asset’s original cost. Transfers from revaluation surplus to retained earnings are not made through
profit or loss.