Pirena Company completed the construction of a shopping mall at the end of 2018 for a total cost of P200 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.

An independent valuation expert was used by the company to fair value the shopping mall on annual basis. According to the fair valuation expert, the fair values of the shopping mall at the end of 2019 and 2020 were P240 million and P230 million, respectively.

If Pirena Company opted to use the cost model to measure the shopping mall, how much should be recognized in profit or loss in 2020 as depreciation expense?

Answer rating: 100% (QA)

If Pirena Company opted to use the cost model to measure the shopping mall the depreciation expense ... View the full answer