XML 21 R10.htm IDEA: XBRL DOCUMENT

4. PREPAID LAND LEASE	9 Months Ended
Sep. 30, 2016
Notes to Financial Statements
4. PREPAID LAND LEASE	The Company prepaid its land leases with lease terms for periods ranging from one to fifty years to use the land on which the production facilities and warehouses of the Company are situated. The prepaid land lease is amortized on a straight line basis. During the three-month period ended September 30, 2016 and 2015, amortization of prepaid land leases totaled $259,194 and $257,083, respectively, which amounts were recorded as cost of net revenue. During the nine-month period ended September 30, 2016 and 2015, amortization of prepaid land leases totaled $514,454 and $511,170, respectively, which amounts were recorded as cost of net revenue. The Company has the rights to use certain parcels of land located in Shouguang, the PRC, through lease agreements signed with local townships or the government authority. For parcels of land that are collectively owned by local townships, the Company cannot obtain land use rights certificates. The parcels of land that the Company cannot obtain land use rights certificates cover a total of approximately 59.43 square kilometers with an aggregate carrying value of $886,580 and approximately 59.43 square kilometers with an aggregate carrying value of $686,073 as at September 30, 2016 and December 31, 2015, respectively.

4. PREPAID LAND LEASE

9 Months Ended

Sep. 30, 2016

The Company prepaid its land leases with lease terms for periods ranging from one to fifty years to use the land on which the production facilities and warehouses of the Company are situated. The prepaid land lease is amortized on a straight line basis.

During the three-month period ended September 30, 2016 and 2015, amortization of prepaid land leases totaled $259,194 and $257,083, respectively, which amounts were recorded as cost of net revenue. During the nine-month period ended September 30, 2016 and 2015, amortization of prepaid land leases totaled $514,454 and $511,170, respectively, which amounts were recorded as cost of net revenue.

The Company has the rights to use certain parcels of land located in Shouguang, the PRC, through lease agreements signed with local townships or the government authority. For parcels of land that are collectively owned by local townships, the Company cannot obtain land use rights certificates. The parcels of land that the Company cannot obtain land use rights certificates cover a total of approximately 59.43 square kilometers with an aggregate carrying value of $886,580 and approximately 59.43 square kilometers with an aggregate carrying value of $686,073 as at September 30, 2016 and December 31, 2015, respectively.