55 Question 1 (12 marks) 56 Royals Industries Ltd. is a company in the high-technology industry, Royals has been working on developing a new solar panel technology. The technology meets all of the six criteria required to capitalize on development costs. During 2020. Royals incurred the following costs related to research and development: 57 58 0 21 2 73 14 075 6 77 78 79 30 31 Rent of facility Salaries of supporting staff Legal costs to obtain a new patent for technology Legal costs of defending the new patent in court Materials consumed in the manufacture of prototypes Consulting fees paid for general research Indirect costs related to research and development $250,000 $290,000 $60,000 $72,000 $43.000 $45,200 $9.700 Instructions Calculate the amount that Royals would be allowed to capitalize as an intangible asset for 2020, assuming that Royals follows IFRS. (6 marks) b) List the six criteria that must be met before the development costs of a project may be capitalized. (6 marks) 84 85 Q1 Answers