QUESTION 1: 20 Marks APX programmers PTY Ld deals in developing programs legible for use in the artificial intelligence space of the information technology industry At 30 June 2020, APX programmers had the following projects in the pipeline Project North: Project North is involved in the development of a program that will allow human independence in the process of paying groceries in Super markets. The project has been submitted for approval to the board of directors for customer review and feasibility. However, a top IT Technician from an independent review board has identified faults in the program. The faults will cost APT Robotics N$ 15million to fix and the board of directors does not find it feasible to continue with the project. Project Sossuvlei: Project Sossusvlei is currently at stage two of the process. The project will allow users to be able to perform COVID-19 self-testing with their smartphone devices. The program has been tested on the IPhone devices and 90% of the results have come out accurate to the manual swab testing. The program is confirmed to be legible for use to IOS users only at the moment. not to the Android users. Apple Limited has been keeping tabs on the programming progress, and are very eager to feature the program in their new Iphone 5 Series. Apple Limited is prepared to fund the program, at any stage of development and are ready to assist APX with their team of highly specialized technicians in completing the program at no cost. Apple limited has entered into an agreement with APX to buy the program from them at completion of the development. Costs incurred for the period ended 30 June 2020: and Material and Services Technicians Labor Direct overheads Indirect Overheads Rental of research facilities Field research Program test Administrative Cost N$ 000 North 1.000,00 2.000.00 100.00 2.000.00 2.000.00 366.00 200.00 100.00 7.766.00 NS 000 Sossusvlei 5.000.00 6.000.00 3.000.00 200.00 5.000.00 532.00 6.000.00 100.00 25,832.00 Page 11 of 21 Required: 1.1 Discuss the IAS 38 requirements for capitalizing development costs. 2.2 Discuss according to the criteria listed in 1 Whether each of the two projects qualifies to be capitalized to development costs. Disclose the costs of the two projects in the financial statements of APX 6 Robotics (Pty) Ltd as at 30 June 2020. 2.3