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FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2012
FAIR VALUE MEASUREMENTS [Abstract]  
FAIR VALUE MEASUREMENTS

11. FAIR VALUE MEASUREMENTS

The following table presents the financial instruments for which fair value does not approximate carrying value as of December 31, 2011 and 2012:

 

                                 
     As of December 31, 2011      As of December 31, 2012  
         
     Carrying Value      Fair Value      Carrying Value      Fair Value  
         

Long-term bank borrowing

    $ 165,646,211       $ 151,251,136       $ 187,520,880       $ 166,148,388   

Payables for purchase of property, plant and equipment

      4,157,836         3,701,431       $ 1,126,255       $ 1,014,716   

Nonrecurring Fair Value Measurements

The following table displays assets and liabilities that were measured at fair value on a non-recurring basis after initial recognition; the Company did not have any assets or liabilities measured at fair value on a non-recurring basis for the years ended December 31, 2010 and 2011.

 

                                         
     Year ended December 31, 2012  

Description

    Total      Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		      Significant
Other
Observable
Inputs (Level 2)		      Significant
Unobservable
Inputs (Level 3)		      Total Losses  

Long-lived assets held and used

    $ 10,532,637       $         $ -         $ 10,532,637       $ 42,754,481   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

In 2012, long-lived assets held and used with a carrying amount of $53.3 million were written down to their fair value of $10.5 million, resulting in an impairment charge of $42.8 million. The fair value is estimated using a discounted cash flow model under the income approach. The discounted cash flow method involves forecasting the future cash flows and then discounting them back to a present value at an appropriate discount rate. The discount rate is estimated based on a weighted average cost of capital method, which measures a Company's cost of debt and equity financing weighted by the percentage of debt and equity in a Company's target capital structure as determined through reference to the identified guideline companies. The cost of equity was derived from the CAPM and the cost of debt was benchmarked to the People's Bank of China's long term borrowing rate in China.