Due to rising property prices, Downing decided to revalue its land and buildings on 1 April 20X5 to their market value. On 1 April 20X5, prior to the revaluation exercise, the carrying value of land was $14m and buildings were carried at their original cost of $50m less accumulated depreciation of $5m. The values were confirmed at that date as land $16m and buildings $52.2m with the buildings having an estimated remaining life of 18 years at the date of revaluation. Downing intends to make a transfer from the revaluation surplus to retained earnings in respect of the annual realization of the revaluation surplus. Ignore deferred tax on the revaluation. No depreciation has yet been charged on non-current assets for the year ended 31 March 20X6.

Required:

Based on the information provided, explain the appropriate accounting treatment.