I realize this is a very straitforward question but I am actually having a hard time getting an answer. I thought it should affect additional paid-in capital but I was reading and learned “a change in the market value of common stock does not affect ROE”.
Common stock is recorded at par value, and additional paid-in capital is recorded at historical value (i.e., the actual cash paid in at the time the stock was issued). Neither change because of a change in the market price of the stock.
That is correct. Under IFRS changes in revaluation surplus caused by changes in market value of asset does change overal capital and ROE.