Special purpose entity

During the year ended 31 December 20X6, Guidance Co stated that it had reorganised its assets and set up a SPE.
Guidance Co transferred property to the SPE at its carrying amount of $50 million, but had incorrectly charged revaluation reserves with this amount rather than showing the transfer as an investment in the SPE. The property was the SPE’s only asset. However, Guidance Co still managed the property, and any profit or loss relating to the assets of the entity was remitted directly to Guidance Co. Guidance Co had no intention of consolidating the SPE.

answer was:
By transferring their assets to a SPE, the asset turnover ratio will be significantly larger. However, the SPE should be consolidated by Guidance Co in its group financial statements and the property included in assets and the charge eliminated from revaluation reserves in its single entity financial statements. The latter will increase shareholder equity.

sir my question is that why the share holders equity will increase? / why does it say ‘the latter will increase shareholders equity’