1. A construction company completed the construction of a shopping mall at the end of 2016 for a total cost of P100 million. The mall has an estimated economic life of 25 years. The mall was constructed for the purpose of earning rentals by letting out space in the shopping mall to tenants. The company opted to use the fair value model to measure the shopping mall. An independent valuation expert was used by the company to fair value the shopping mall on an annual basis. According to the fair valuation expert the fair values of the shopping mall at the end of 2017 and 2018 were P120 million and P105 million, respectively.

How much should be recognized in profit or (loss) in 2018 as a result of the fair value changes?

2. On January 1, 2020, Shanghai Company owned a group of machines with the following aggregate cost and accumulated depreciation:

Machinery 76,500,000

Accum. Depreciation 21,250,000

The machines have an average remaining useful life of 4 years and it has been determined that this group of machines constitutes a CGU. The fair value less cost of disposal of this group of machines in an active market is determined to be P40,800,000. Based on supportable and reasonable assumptions, the financial forecast for this group of machines reveals the following cash inflows and cash outflows for the next four years:

Year Cash Inflows Cash Outflows

2020 25,500,000 10,200,000

2021 27,625,000 14,875,000

2022 23,375,000 10,625,000

2023 13,600,000 3,400,000

It is believed that a discount rate of 8% is reflective of time value of money. The PVF are given below:

Period PV of 1

1 0.930

2 0.857

3 0.794

4 0.735

Compute the impairment loss