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INTANGIBLE ASSETS | 12 Months Ended
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Dec. 31, 2014
INTANGIBLE ASSETS |
INTANGIBLE ASSETS | NOTE 7 - INTANGIBLE ASSETS Intangible assets represent the cost of medical formulas approved for production by the CFDA. The Company did not obtain CFDA production approval for any medical formula during the year ended December 31, 2014 and 2013 and no costs were reclassified from advances to intangible assets in 2014 and 2013, respectively. Approved medical formulas are amortized from the date CFDA approval is obtained over their individually identifiable estimated useful life, which range from ten to thirteen years. It is at least reasonably possible that a change in the estimated useful lives of the medical formulas could occur in the near term due to changes in the demand for the drugs and medicines produced from these medical formulas. Amortization expense relating to intangible assets was $386,440 and $766,318 for the years ended December 31, 2014 and 2013, respectively, and was included in the general and administrative expenses. Medical formulas typically do not have a residual value at the end of their amortization period. The Company evaluates each approved medical formula for impairment at the date of CFDA approval, when indications of impairment are present and at the date of each financial statement. The Company’s evaluation is based on an estimated undiscounted net cash flow model, considering currently available market data for the related drug and the Company’s estimated market share. If the carrying value of the medical formula exceeds the estimated future net cash flows, an impairment loss is recognized for the excess of the carrying value over the fair value of the medical formula, which is determined by the estimated discounted future net cash flows. No impairment losses were recognized during the years ended December 31, 2014 and 2013, respectively. Intangible assets consisted solely of CFDA approved medical formulas as follows:
|  | December 31, |  |  | December 31, |
|  | 2014 |  |  | 2013 |
Gross carrying amount |  | $ | 5,499,494 |  |  | $ | 5,524,785 |
Accumulated amortization |  |  | (4,182,273 | ) |  |  | (3,812,992 | )
Net carrying amount |  | $ | 1,317,221 |  |  | $ | 1,711,793 |
The estimated aggregate annual amortization expense for each of the next five years and thereafter is as follows:
Year |  | Amount
2015 |  | $ 321,753
2016 |  | 300,191
2017 |  | 258,094
2018 |  | 137,930
2019 |  | 64,755
Thereafter |  | 234,498
Total |  | $ 1,317,221

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- Definition The entire disclosure for all or part of the information related to intangible assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 + Details
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