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PROPERTY AND EQUIPMENT | 12 Months Ended
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Dec. 31, 2013
PROPERTY AND EQUIPMENT |
PROPERTY AND EQUIPMENT | NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment consisted of the following:
|  | December 31, |  |  | December 31, |
|  | 2013 |  |  | 2012 |
Permit of land use |  | $ | 460,964 |  |  | $ | 447,013 |
Building |  |  | 2,494,623 |  |  |  | 2,419,125 |
Plant, machinery and equipment |  |  | 6,671,620 |  |  |  | 6,381,209 |
Motor vehicle |  |  | 151,670 |  |  |  | 147,080 |
Office equipment |  |  | 229,210 |  |  |  | 222,273 |
Construction in progress |  |  | 25,497,600 |  |  |  | 3,688,567 |
Total |  |  | 35,505,687 |  |  |  | 13,305,267 |
Less: accumulated depreciation |  |  | (5,264,350 | ) |  |  | (4,273,373 | )
Property and Equipment, net |  | $ | 30,241,337 |  |  | $ | 9,031,894 |
Construction in progress consists primarily of the construction of a new production facility, the acquisition of related equipment and capitalized interest during the construction period. Once the machinery is in production and the facility is in use, construction in progress is moved into plant, machinery and equipment and depreciated. A reconciliation of total interest cost incurred to interest expense as recognized in the consolidated statement of operations is as follows:
|  | For the Years |
|  | Ended December 31, |
|  | 2013 |  |  | 2012 |
Total interest cost incurred |  | $ | 583,400 |  |  | $ | 308,375 |
Interest cost capitalized |  |  | 234,704 |  |  |  | - |
Interest expense |  | $ | 348,696 |  |  | $ | 308,375 |
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:
Asset |  | Life - years
Permit of land use |  | 40 - 70
Building |  | 20 - 35
Plant, machinery and equipment |  | 10
Motor vehicle |  | 5 - 10
Office equipment |  | 3-5
Depreciation relating to office equipment was included in general and administrative expenses, while all other depreciation was included in cost of revenue. For the years ended December 31, 2013 and 2012, depreciation expense was $846,512 and $851,047, respectively.

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- Definition The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Principles Board Opinion (APB) -Number 12 -Paragraph 5 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6391035&loc=d3e2868-110229 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2921-110230 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.13-14) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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