Answer: Decrease.

**Explanation:** An upward revaluation of an asset under the revaluation model increases the carrying amount of the asset. This increase bypasses the income statement and is recorded directly in equity under the revaluation surplus. The financial leverage ratio is calculated as average total assets divided by average total equity. When both the numerator (assets) and denominator (equity) increase by the same amount, the ratio declines if it is initially greater than one (as in this case). Mathematically, this occurs because the proportional increase in equity reduces the ratio. Therefore, the financial leverage ratio will decrease. **Distractors:** - **B (Remain unchanged):** Incorrect because increasing both assets and equity by the same amount reduces the ratio when it is greater than one. - **C (Increase):** Incorrect because the ratio declines under the given conditions.

Author: LeetQuiz Editorial Team