Question: An asset has book value of $120, accumulated depreciation of $20, and recoverable amount of $90. Assume that previous increase was $10. (Under revaluation model )

Write off the book value to carrying amount:

Dr Accum. depn 20

Cr Asset 20

Reverse previous increase through impairment loss:

Dr Asset revaluation surplus (OCI) 7

Dr Deferred tax liability 3

Cr Asset 10

Can someone tell me why we need to reverse previous increase through impairment loss, and why there is Deferred tax liability? Thank you