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Prepayments and Other Receivables
 12 Months Ended
Sep. 30, 2013
Prepayments and Other Receivables [Text Block]
6.

Prepayments and Other Receivables

   
 

Prepayments and other receivables as of September 30, 2012 and 2013 consisted of the following:

 

                                                           

 Note     2012     2013  
 

 

                
 

Prepayments for raw materials and others

     $ 4,458,058   $ 3,466,177  
 

Staff advances

       1,014,814     701,923  
 

Prepaid operating expenses

       1,176,592     292,049  
 

Advances to unrelated third parties

 (a)     -     1,169,798  
 

Advance to a related party

 (b)     -     885,052  
 

Consideration receivable (Note 8(b))

       -     6,483,507  
 

Net assets of BAK Canada held by trustee

 (c)     -     1,043,833  
 

Value added tax recoverable

       5,698,687     4,295,390  
 

Others

       1,099,867     1,409,029  
 

 

       13,448,018     19,746,758  
 

Less: Allowance for doubtful accounts

       (1,305,329 )   (1,980,914 )
 

 

     $ 12,142,689   $ 17,765,844  

  (a)

Advances to unrelated third parties were interest-free, unsecured and repayable on demand.
     
  (b)

As of September 30, 2013, the Company advanced to Tianjin BAK New Energy Research Institute Co., Ltd (“Tianjin New Energy”), a related party under the common control of Mr. Xiangqian Li, the Company's CEO, an amount of $885,052 which was interest-free, unsecured and repayable on demand.

     
  (c)

BAK Canada filed for bankruptcy on March 28, 2013. As of September 30, 2013, its net assets were held under the custody of its trustee.

An analysis of the allowance for doubtful accounts is as follows:

      2012     2013  
               
  Balance at beginning of year $ 694,587   $ 1,305,329  
  Provision for the year   594,956     1,100,035  
  Recovery for the year   -     (466,617 )
  Foreign exchange adjustment   15,786     42,167  
  Balance at end of year $ 1,305,329   $ 1,980,914