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INTANGIBLE ASSETS
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12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2014
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible Assets Disclosure [Text Block] | NOTE 8. INTANGIBLE ASSETS Intangible assets consisted of the following:
According to government regulations of the PRC, the PRC Government owns all land. The Company owns the land use rights of farmland and industrial land. JingzhongDeyu, one of the Company-owned land use rights of the 17,000 acres of farmlands in Jinzhong, Shanxi Province. There is no active market for trading of land use rights of those farmlands and the Company could not assess the fair market value of the land use rights based on quoted prices in active markets. The Company assessed fair value of the land use rights based on discounted cash flow and determined that it was less than the carrying value. The balance of impairment of farmland use rights as of December 31, 2014 and December 31, 2013 was $5,819,359 and $5,832,800, respectively. As of December 31, 2014, the original value of the land use rights of the farmland was $7,516,359 and was written-down to $1,697,000. The Company determined the ERP system and B2C platform owned by JingzhongDeyu for retail sales of the Grain Division was not applicable for its current business operations due to the reduction of retail sales. The balance of impairment of ERP system and B2C platform as of December 31, 2014 and December 31, 2013 was $738,396 and $740,102, respectively. As of December 31, 2014, the carrying value of ERP system and B2C platform was $1,047,610 and was written down to $0. The Company leases and has obtained a certificate of right of use on 11,667 square meters with the PRC Government in Jinzhong, Shanxi Province where JinzhongDeyu's buildings and production facility are located. The term of the right is four to five years and is automatically renewed upon expiration. The right was fully amortized as of December 31, 2010 using the straight-line method. On June 18, 2012, the Company received the extended land use right certificate and the term of the right was extended to March 14, 2037. Huichun leases and has obtained a certificate of right to use on 100,000 square meters of industrial land with the PRC Government in Quwo County, Shanxi Province where Taizihu Group’s buildings and production facility are located. The term of the right is 50 years from October 28, 2008 to October 27, 2058. The amortization of the land use right was commenced in October 2008 using the straight-line method over 50 years. As of December 31, 2014, $3,892,585 (RMB 19 million) of the land use right owned by Taizihu Group was pledged as collateral for short-term bank loans. Amortization expense of the intangible assets for the year ended December 31, 2014 and 2013 was $167,242 and $382,826, respectively. |
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