On December 31, 2021 Maiden Company enters into factoring arrangement involving its trade receivables with a carrying amount of P10,000,000 with Surplus Company. The arrangement resulted into the transfer of the portfolio for a consideration of P9,800.000. Maiden Company transfers the credit risks but retains the late payment risk up to a maximum of 180 days. After 180 days, the receivable is deemed to be in default and credit insurance takes effect. A charge is levied on Maiden Company for these late payments using a current rate of 6%. The fair value of the guarantee of late payment risk is P40,000. Apart from the late payment risk. Maiden Company does not retain any credit or any interest rate risk and does not carry out any servicing of the portfolio. There is no active market for the receivables.

Question 1: What amount of financial asset Maiden Company should continue to recognize in its December 31, 2021 balance sheet, assuming Maiden Company has retained control on the transferred financial asset?

Question 2: What amount of loss from the transfer should Maiden Company recognize as a result of the transfer of financial asset?