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Intangible Assets

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

6. INTANGIBLE ASSETS

On May 1, 2020, the Company launched CCM v3.0, which creates a new value cycle system of online shopping malls with a real-name blockchain system. After the launch of CCM v3.0, the Company reclassified this prepaid asset into intangible assets in the second quarter of 2020, which will be amortized over 10 years.

Also included in the intangible assets is land use right. The government of the PRC, its agencies and collectives hold all land ownership. Companies or individuals are authorized to use the land only through land usage rights granted by the PRC government. Land usage rights can be transferred upon approval by the land administrative authorities of the PRC (State Land Administration Bureau) upon payment of the required land transfer fee. Accordingly, the Company paid in advance for land usage rights. Prepaid land usage rights are being amortized and recorded as lease expenses using the straight-line method over the terms of the leases, which range from 40 to 50 years. The amortization expense was $0.09 million and $0.59 million for the six months ended June 30, 2020.

The following table sets intangible assets of the Company as of June 30, 2020 and December 31, 2019, respectively.

	CCM						Land Use Right
	June 30,			December 31,			June 30,			December 31,
	2020			2019			2020			2019
Cost	$	1,878,664		$	43,004		$	5,761,692		$	5,847,008
Less: Accumulated amortization		(34,843	)		(2,114	)		(624,183	)		(574,992	)
Balance as of June 30, 2020	$	1,843,821			40,890		$	5,137,509		$	5,272,016

The following table summarizes the expected amortization expense for the following years (in thousands):

	Amortization to be
Year ending December 31,	recognized

2020 (excluding the six months ended March 31, 2020)	$	151
2021		303
2022		303
2023		303
2024		303
2025 and thereafter		5,618
Total	$	6,981