Accounting Subject: treatment of gains/losses due to increases/decreases in fair value

Problem:

IFRS allows a remeasurement of certain assets to fair value through a revaluation method. This increase is recorded as part of a revaluation surplus account, which bypasses the income statement and, therefore, does not affect net income.

-Do you think this is an appropriate method?

-Why should investment property increases affect net income as opposed to PP&E?

--Explain your position whether you agree or disagree with the accounting treatment for revaluation surplus.