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RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended
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Dec. 31, 2018
Related Party Transactions [Abstract] |
RELATED PARTY TRANSACTIONS AND BALANCES | 15. RELATED PARTY TRANSACTIONS AND BALANCES
(1) | The relationships between the Group and related party are as follows:
Name of the related party |  | Relationship
Daqo Group Co., Ltd. (“Daqo Group”) |  | Daqo Group and the Group are controlled by same group of shareholders.
Zhenjiang Daqo Solar Co. Ltd.(“Zhenjiang Daqo”) |  | An affiliated company which is 100% held by Daqo Group
Daqo Solar Co. Ltd (“Daqo Solar”) |  | An affiliated company which is 100% held by Daqo Group
Xinjiang Daqo Investment Co., Ltd. ("Xinjiang Daqo Investment") |  | An affiliated company which is 100% held by Daqo Group before December 20,2018 and is 100% held by the Group since December 20,2018
Daqo New Material Co., Ltd. ("Daqo New Material") |  | An affiliated company which was 100% held by Daqo Group, and was consolidated by the Group as VIE on December 31, 2013
Chongqing Daqo Tailai Electric Co., Ltd. (“Chongqing Daqo Tailai”) |  | An affiliated company which is 100% held by Daqo Group
Nanjing Daqo Transformer Systems Co., Ltd. (“Nanjing Daqo Transformer”) |  | An affiliated company which is 100% held by Daqo Group
Jiangsu Daqo Changjiang Electric Co., Ltd. (“Jiangsu Daqo”) |  | An affiliated company which is 100% held by Daqo Group
Nanjing Daqo Electric Co., Ltd. (“Nanjing Daqo Electric”) |  | An affiliated company which is 100% held by Daqo Group
Zhenjiang Klockner-Moeller Electrical Systems Co., Ltd. (“Zhenjiang Moeller”) |  | An affiliated company which is 100% held by Daqo Group
Nanjing Intelligent Apparatus Co., Ltd. (“Intelligent Apparatus”) |  | An affiliated company which is 100% held by Daqo Group
Shanghai Sailfar Electric Technology Co., Ltd. (“Daqo Sailfar”) |  | An affiliated company which is 100% held by Daqo Group
Jiangsu Daqo Kai-fan Electric Co., Ltd. ( “Jiangsu Daqo Kai-fan”) |  | An affiliated company which is 100% held by Daqo Group
Zhenjiang Electric Equipment Co., Ltd. ( “Zhenjiang Electric”) |  | An affiliated company which is 100% held by Daqo Group
Jiangsu Daqo ETE Electronic Systerm Co., Ltd.(“Jiangsu Daqo ETE Electronic”) |  | An affiliated company which is 75% held by Daqo Group
Jiangsu Daquan Kai-fan Switchgear Co., Ltd (“Jiangsu Daquan Kai-fan Switchgear”) |  | An affiliated company which is 100% held by Daqo Group
Nanjing Yidian Huichuang information technology Co., Ltd (“Nanjing Yidian”) |  | An affiliated company which is 100% held by Daqo Group
Xinjiang Daqo Tianfu Thermoelectric Co., Ltd. ("Xinjiang Daqo Tianfu Thermoelectric") |  | A joint-venture which is 50% held by Xinjiang Daqo Investment
Nanjing Daqo Automation Technology Co., Ltd.("Nanjing Daqo Automation") |  | An affiliated company which is 100% held by Daqo Group
(2) | Related party balances:
The balances due from related parties of continuing operations mainly included the receivables from Xinjiang Daqo Tianfu Thermoelectric for investment fund as of December 31, 2018, which has been subsequently collected in January 2019. The balances due from related parties of discontinued operations mainly included the notes receivable from Zhenjiang Daqo for sales of wafer. The balances are as follows:
|  | December 31, |
|  | 2017 |  |  | 2018 |
Amounts due from related parties (continuing operations) |  |  |  |  |  |  |  |
Xinjiang Daqo Tianfu Thermoelectric |  | $ | - |  |  | $ | 629,495 |
Others |  |  | 5,799 |  |  |  | 185,540 |
Total |  | $ | 5,799 |  |  | $ | 815,035 |
Amounts due from related parties (discontinued operations) |  |  |  |  |  |  |  |
Zhenjiang Daqo |  | $ | 8,585,337 |  |  | $ | 1,453,800 |
Others |  |  | 406,303 |  |  |  | 913,857 |
Total |  | $ | 8,991,640 |  |  | $ | 2,367,657 |
The balances due to related parties – short-term portion of continuing operations mainly included payables to Chongqing Daqo Tailai for purchases of machines for polysilicon expansion as of December 31, 2018. The balances due to related parties – short-term portion of discontinued operations mainly included payables to Daqo New Material for rental expenses. The balances are payable on demand and are as follows:
|  | December 31, |
|  | 2017 |  |  | 2018 |
Amounts due to related parties – short term portion (continuing operations) |  |  |  |  |  |  |  |
Chongqing Daqo Tailai |  | $ | 494,954 |  |  | $ | 1,825,680 |
Others |  |  | 1,342,166 |  |  |  | 434,327 |
Total |  | $ | 1,837,120 |  |  | $ | 2,260,007 |
Amounts due to related parties – short term portion (discontinued operations) |  |  |  |  |  |  |  |
Daqo New Material |  | $ | 4,852,819 |  |  | $ | 5,314,587 |
Others |  |  | 79,959 |  |  |  | - |
Total |  | $ | 4,932,778 |  |  | $ | 5,314,587 |
The balance due to related parties – long-term portion of $16.9 million represents the consideration payables to Daqo Group for the acquisition of Xinjiang Daqo Investment as of December 31, 2018, which will be paid in two equal installments in 2020 and 2021.
(3) | Related party transactions:
The transactions with Daqo Group and its subsidiaries were as follows:
|  | Transaction |  | Year Ended December 31, |
Name of Related parties |  | Nature |  | 2016 |  |  | 2017 |  |  | 2018 |
Daqo Group |  | Proceeds from interest free loans |  | $ | - |  |  | $ | 2,696,513 |  |  | $ | 25,744,800 |
|  | Repayment of interest free loans |  |  | 10,974,807 |  |  |  | 2,696,513 |  |  |  | 36,648,480 |
|  | Repayment of interest bearing loans |  |  | 15,059,000 |  |  |  | 15,495,451 |  |  |  | - |
|  | Interest charged |  |  | 850,380 |  |  |  | 440,368 |  |  |  | - |
|  | Rental expense |  |  | 27,997 |  |  |  | 37,756 |  |  |  | 38,633 |
Zhenjiang Daqo |  | Proceeds from interest free loans |  |  | - |  |  |  | - |  |  |  | 10,903,680 |
|  | Sales |  |  | 11,194,197 |  |  |  | 13,442,273 |  |  |  | 6,694,997 |
Daqo Solar |  | Proceeds from interest free loans |  |  | 60,300,896 |  |  |  | 40,089,689 |  |  |  | 55,613,463 |
|  | Repayment of interest free loans |  |  | 68,766,506 |  |  |  | 40,388,195 |  |  |  | 55,650,696 |
Nanjing Daqo Transformer |  | Purchase-Fixed assets |  |  | - |  |  |  | - |  |  |  | 6,201,243 |
Xinjiang Daqo Investment |  | Proceeds from interest free loans |  |  | 56,270,085 |  |  |  | 14,356,000 |  |  |  | 3,937,440 |
|  | Repayment of interest free loans |  |  | 38,715,449 |  |  |  | 14,356,000 |  |  |  | 4,020,732 |
|  | Rental expense |  |  | 890,168 |  |  |  | 874,858 |  |  |  | 895,192 |
Daqo New Material |  | Purchase-Fixed assets |  |  | - |  |  |  | 7,390,693 |  |  |  | - |
|  | Proceeds from interest free loans |  |  | 9,607,344 |  |  |  | 6,029,877 |  |  |  | 1,893,000 |
|  | Repayment of interest free loans |  |  | 12,262,592 |  |  |  | 10,818,493 |  |  |  | 1,893,000 |
|  | Rental expense |  |  | 993,894 |  |  |  | 976,800 |  |  |  | 499,752 |
Chongqing Daqo Tailai |  | Purchase-Fixed assets |  |  | 3,534,248 |  |  |  | 715,361 |  |  |  | 8,240,830 |
|  | Income from sales of materials |  |  | - |  |  |  | - |  |  |  | 15,899 |
|  | Income from disposal of fixed assets |  |  | - |  |  |  | - |  |  |  | 478,565 |
|  | Proceeds from interest free loans |  |  | 222,517 |  |  |  | - |  |  |  | 6,209,040 |
|  | Repayment of interest free loans |  |  | 2,684,783 |  |  |  | - |  |  |  | 6,209,040 |
Jiangsu Daqo |  | Purchase-Fixed assets |  |  | - |  |  |  | - |  |  |  | 1,326,634 |
Nanjing Daqo Electric |  | Purchase-Fixed assets |  |  | - |  |  |  | - |  |  |  | 1,439,332 |
Zhenjiang Electric |  | Purchase-Raw material |  |  | - |  |  |  | - |  |  |  | 331,353 |
Others subsidiaries under Daqo Group |  | Purchase-Fixed assets |  |  | 2,120,768 |  |  |  | 80,240 |  |  |  | 296,887 |
|  | Purchase-Raw material |  |  | 129,219 |  |  |  | 17,651 |  |  |  | 13,688 |
Total |  | Sales |  | $ | 11,194,197 |  |  | $ | 13,442,273 |  |  | $ | 6,694,997 |
|  | Income from disposal of fixed assets |  | $ | - |  |  | $ | - |  |  | $ | 478,565 |
|  | Income from sales of materials |  | $ | - |  |  | $ | - |  |  | $ | 15,899 |
|  | Purchase-Fixed assets |  | $ | 5,655,016 |  |  | $ | 8,186,294 |  |  | $ | 17,504,926 |
|  | Purchase-Raw material |  | $ | 129,219 |  |  | $ | 17,651 |  |  | $ | 345,041 |
|  | Rental expense |  | $ | 1,912,059 |  |  | $ | 1,889,414 |  |  | $ | 1,433,577 |
|  | Interest expense |  | $ | 850,380 |  |  | $ | 440,368 |  |  | $ | - |
|  | Proceeds from related parties loans |  | $ | 126,400,842 |  |  | $ | 63,172,079 |  |  | $ | 104,301,423 |
|  | Repayment of related parties loans |  | $ | 148,463,137 |  |  | $ | 83,754,652 |  |  | $ | 104,421,948 |

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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