Question 3: Intangible assets (16 marks - 32 minutes) Chicken Feet Ltd (Chicken Feet') is a fast-food franchise that sells chicken burgers, wraps and chicken pieces. The CFO of Chicken Feet indicated at the last board meeting that the cost of raw materials to make their delicious food has increased significantly over the past period. The director of technology and innovation responded as follow: "We must invest in building 3D printers which can print food. We will be the first company in the world to do this and it will also reduce the cost of the raw material we need for our products." The board of directors voted in favour of the Director's proposal and instructed her to start with the research and development of the 3d printer and any materials it may need to print the food The following information applies to the 31 December 2021 financial year. After performing extensive research and having developed a workable design, Chicken Feet rented a small laboratory in Wellington, to research and test the 3D printer and materials, for two years. The rental amounted to $10,000 per month. Chicken Feet recruited seven food science graduates, a biochemical engineer and a computer scientist who specialise in advanced coding to work on this new project. The director of technology and innovation also hired Ms Sparkle, an experienced food scientist, to lead the team. All the new staff started their employment with Chicken Feet on 1 January 2021. Chicken Feet registered a trademark and copyright for the name Instachickeno on 30 June 2021. Instachicken will be used as the market brand. By 31 May 2021 Ms Sparkle had already decided that the development would be viable, and from this date dedicated an existing member of the Chicken Feet accounting department to maintain separate records for Instachicken. This would enable Chicken Feet to reliably determine the cost of development, production and profit. The Chicken Feet Board of Directors met on 18 July 2021 and was impressed by the progress made by the team. The Board remains committed to the Instachicken project and has approved the project budget for the next eight years. By 30 September 2021, Ms Sparkle and her team announced that they were confident they had created a successful product. These raw materials, which Ms Sparkle and her team had developed, had the necessary flavour and texture to let the printed product taste like real chicken. Chicken Feet has managed to obtain contracts with other fast-food franchises in Europe and the United States, who will buy the printed chicken products in bulk and use them to expand their product line as well. Required Determine, with reference to NZ IAS 38 Intangible Assets, whether and from which date any expenditure on Instachicken would qualify for capitalisation as an intangible asset in the financial statements of Chicken Feet Do not discuss the definition of an intangible asset