Answer: other comprehensive income.

## Explanation Under the revaluation model in accounting: 1. **Revaluation Model Basics**: The revaluation model allows companies to carry assets at fair value rather than historical cost. When an asset's fair value increases above its carrying amount, this increase is recognized. 2. **Treatment of Revaluation Increases**: According to accounting standards (IFRS and similar frameworks): - **Initial revaluation increases** (when an asset's carrying amount is increased for the first time) are recognized in **other comprehensive income (OCI)** and accumulated in equity under revaluation surplus. - Subsequent revaluation increases may be treated differently, but the initial increase goes to OCI. 3. **Why not the other options**: - **A. Financial leverage ratio**: This ratio (debt/equity) would actually decrease because equity increases through the revaluation surplus, not increase. - **C. Current period return on assets**: ROA (net income/assets) would likely decrease because assets increase in the denominator while net income is unaffected by OCI entries. 4. **Key Accounting Treatment**: - Debit: Asset account (increase) - Credit: Revaluation surplus in equity (through OCI) Therefore, the correct answer is **B. other comprehensive income**.

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