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Property, Plant and Equipment, net

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment, net [Text Block]

7. Property, Plant and Equipment, net

Property, plant and equipment as of December 31, 2017 and September 30, 2018 consisted of the following:

		December 31,			September 30,
		2017			2018
Buildings	$	24,979,022		$	23,663,112
Machinery and equipment		13,977,734			20,833,717
Office equipment		184,014			194,106
Motor vehicles		206,190			154,308
		39,346,960			44,845,243
Impairment		(1,010,216	)		(956,997	)
Accumulated depreciation		(3,371,234	)		(4,803,749	)
Carrying amount	$	34,965,510		$	39,084,497

During the three months ended September 30, 2017 and 2018, the Company incurred depreciation expense of $368,630 and $639,239, respectively.

During the nine months ended September 30, 2017 and 2018, the Company incurred depreciation expense of $989,325 and $1,749,608, respectively.

The Company has not yet obtained the property ownership certificates of the buildings in its Dalian manufacturing facilities with a carrying amount of $23,670,773 and $21,928,972 as of December 31, 2017 and September 30, 2018, respectively. The Company built its facilities on the land for which it had already obtained the related land use right. The Company has submitted applications to the Chinese government for the ownership certificates on the completed buildings located on these lands. However, the application process takes longer than the Company expected and it has not obtained the certificates as of the date of this report. However, since the Company has obtained the land use right in relation to the land, the management believe the Company has legal title to the buildings thereon albeit the lack of ownership certificates.

During the course of the Company’s strategic review of its operations, the Company assessed the recoverability of the carrying value of the Company’s property, plant and equipment. The impairment charge, if any, represented the excess of carrying amounts of the Company’s property, plant and equipment over the estimated discounted cash flows expected to be generated by the Company’s production facilities. The Company believes that there was no impairment during the three and nine months ended September 30, 2017 and 2018.

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- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-URI http://asc.fasb.org/topic&trid=2155823

+ Details

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