Capitalization of R&D Costs
Carmanah Industries Ltd Instructions
Calculate the Amount That Carmanah Would Be Allowed to in the High-Technology

Essay

Capitalization of R&D costs
Carmanah Industries Ltd. Is a company in the high-technology industry. Carmanah has been working on developing a new solar panel technology. The technology meets all of the six criteria required in order to capitalize development costs. During 2020, Carmanah incurred the following costs related to research and development:
$$\begin{array} { l l } \text { Rent of facility } & \mathbf { \$ 2 5 0 , 0 0 0 } \\\text { Salaries of recearch staff } & \mathbf { 290 , 0 0 0 } \\\text { Legal costs to obtain new patent for technology } & \mathbf { 4 0 , 0 0 0 } \\\text { Legal costs of defending new patent in court } & 36,000 \\\text { Materials consumed in manufacture of prototypes } & 13,100 \\\text { Consulting fees paid for general research } & \mathbf { 4 5 , 2 0 0 } \\\text { Indirect costs related to recearch and development } & 9,700\end{array}$$ Instructions
Calculate the amount that Carmanah would be allowed to capitalize as an intangible asset for 2020, assuming that Carmanah follows IFRS.