BB Industries Ltd. Is a company in the high-technology industry. BB 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, BB incurred the following costs related to research and development:

Rent of facility $ 250,000

Salaries of supporting staff 290,000

Legal costs to obtain a new patent for technology 40,000

Legal costs of defending the new patent in court 36,000

Materials consumed in the manufacture of prototypes 13,100

Consulting fees paid for general research 45,200

Indirect costs related to research and development 9,700

Instructions

1. Calculate the amount that BB would be allowed to capitalize as an intangible asset for 2020, assuming that BB follows IFRS. (6 marks)
2. List the six criteria that must be met before the development costs of a project may be capitalized. (6 marks)