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Restatement | 9 Months Ended
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Sep. 30, 2016
Restatement [Abstract] |
RESTATEMENT | 22. RESTATEMENT On April 28, 2016, Erdos TCH and Erdos entered a supplemental agreement, effective on May 1, 2016, Erdos TCH cancelled monthly minimum lease payments from Erdos, and charges Erdos based on actual electricity sold at RMB 0.30 / Kwh. The Company evaluated the modified terms for payments based on actual electricity sold as minimum lease payments as defined in ASC 840-10-25-4, since lease payments that depend on a factor directly related to the future use of the leased property are contingent rentals and are excluded from minimum lease payments in their entirety; accordingly, the Company wrote off the net investment receivables of these leases at lease modification date. The consolidated financial statements for the nine and three months ended September 30, 2016 and as of September 30, 2016 were restated to reflect the above determination. The following table presents the effects of the restatement on the accompanying consolidated balance sheet at September 30, 2016:
|  | As Previously Reported |  |  | Restated |  |  | Net Adjustment |
Accounts receivable |  |  | 25,062,146 |  |  |  | 25,723,889 |  |  |  | 661,743 |
Current portion of investment in sales-type leases, net |  |  | 6,948,365 |  |  |  | 6,973,954 |  |  |  | 25,589 |
Interest receivable on sales-type leases |  |  | 3,320,420 |  |  |  | 3,094,017 |  |  |  | (226,403 | )
Other receivables |  |  | 873,448 |  |  |  | 387,477 |  |  |  | (485,971 | )
Investment in sales-type leases, net |  |  | 109,728,463 |  |  |  | 52,512,266 |  |  |  | (57,216,197 | )
Total assets |  |  | 277,533,892 |  |  |  | 220,292,653 |  |  |  | (57,241,239 | )
Deferred tax liability, net (current) |  |  | 1,089,690 |  |  |  | 1,103,309 |  |  |  | 13,619 |
Deferred tax liability, net (non-current) |  |  | 8,811,021 |  |  |  | 2,578,984 |  |  |  | (6,232,037 | )
Total liabilities |  |  | 66,981,515 |  |  |  | 60,763,097 |  |  |  | (6,218,418 | )
Statutory reserve |  |  | 14,448,084 |  |  |  | 14,210,589 |  |  |  | (237,495 | )
Accumulated other comprehensive income |  |  | (2,689,316 | ) |  |  | (2,589,793 | ) |  |  | 99,523 |
Retained earnings |  |  | 87,015,098 |  |  |  | 36,130,249 |  |  |  | (50,884,849 | )
Total company stockholders’ equity |  |  | 210,571,342 |  |  |  | 159,548,521 |  |  |  | (51,022,821 | )
Total liabilities and equity |  |  | 277,533,892 |  |  |  | 220,292,653 |  |  |  | (57,241,239 | )
The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the nine months ended September 30, 2016:
|  | As Previously Reported |  |  | Restated |  |  | Net Adjustment |
Contingent rental income |  |  | - |  |  |  | 2,791,444 |  |  |  | 2,791,444 |
Cost of sales |  |  | - |  |  |  | - |  |  |  | - |
Gross profit |  |  | - |  |  |  | 2,791,444 |  |  |  | 2,791,444 |
Interest income on sales-type leases |  |  | 10,945,411 |  |  |  | 9,879,962 |  |  |  | (1,065,449 | )
Total operating income |  |  | 10,945,411 |  |  |  | 12,671,406 |  |  |  | 1,725,995 |
General and administrative expenses |  |  | 1,153,894 |  |  |  | 3,064,746 |  |  |  | 1,910,852 |
Impairment loss of net investment receivable |  |  |  |  |  |  | 57,168,035 |  |  |  | 57,168,035 |
Income (loss) from operations |  |  | 9,791,517 |  |  |  | (47,561,375 | ) |  |  | (57,352,892 | )
Income (loss) before income tax |  |  | 1,888,854 |  |  |  | (55,464,038 | ) |  |  | (57,352,892 | )
Income tax benefit |  |  | (861,811 | ) |  |  | (7,092,359 | ) |  |  | (6,230,548 | )
Net income (loss) attributable to China Recycling Energy Corporation |  |  | 2,977,791 |  |  |  | (48,144,553 | ) |  |  | (51,122,344 | )
Foreign currency translation gain (loss) |  |  | (5,899,631 | ) |  |  | (5,800,108 | ) |  |  | 99,523 |
Comprehensive loss attributable to China Recycling Energy Corporation |  |  | (2,921,840 | ) |  |  | (53,944,661 | ) |  |  | (51,022,821 | )
The following table presents the effects of the restatement on the accompanying consolidated statement of income and comprehensive income for the three months ended September 30, 2016:
|  | As Previously Reported |  |  | Restated |  |  | Net Adjustment |
Contingent rental income |  |  | - |  |  |  | 1,683,723 |  |  |  | 1,683,723 |
Cost of Sales |  |  | - |  |  |  | - |  |  |  | - |
Gross profit |  |  | - |  |  |  | 1,683,723 |  |  |  | 1,683,723 |
Interest income on sales-type leases |  |  | 2,286,948 |  |  |  | 1,682,428 |  |  |  | (604,520 | )
Total operating income |  |  | 2,286,948 |  |  |  | 3,366,151 |  |  |  | 1,079,203 |
General and administrative expense |  |  | 299,110 |  |  |  | 1,431,719 |  |  |  | 1,132,609 |
Impairment loss of net investment receivable |  |  |  |  |  |  | (1,184,209 | ) |  |  | (1,184,209 | )
Income from operations |  |  | 1,987,838 |  |  |  | 3,118,641 |  |  |  | 1,130,803 |
Income before income tax |  |  | 567,875 |  |  |  | 1,698,678 |  |  |  | 1,130,803 |
Income tax expense (benefit) |  |  | 110,957 |  |  |  | 88,926 |  |  |  | (22,031 | )
Net income attributable to China Recycling Energy Corporation |  |  | 536,839 |  |  |  | 1,689,673 |  |  |  | 1,152,834 |
Foreign currency translation loss |  |  | (1,400,319 | ) |  |  | (2,096,212 | ) |  |  | (695,893 | )
Comprehensive income (loss) attributable to China Recycling Energy Corporation |  |  | (863,480 | ) |  |  | (406,539 | ) |  |  | 456,941 |
The following table presents the effects of the restatement on the accompanying consolidated statement of cash flows for the nine months ended September 30, 2016:
|  | As Previously Reported |  |  | Restated |  |  | Net Adjustment |
Income including noncontrolling interest |  |  | 2,750,665 |  |  |  | (48,371,679 | ) |  |  | (51,122,344 | )
Impairment loss of net investment receivable |  |  | - |  |  |  | 57,168,035 |  |  |  | 57,168,035 |
Changes in deferred tax |  |  | (2,073,235 | ) |  |  | (8,303,783 | ) |  |  | (6,230,548 | )
Interest receivable on sales type leases |  |  | (2,785,713 | ) |  |  | (2,600,856 | ) |  |  | 184,857 |
Net cash provided by operating activities |  |  | 30,432,764 |  |  |  | 30,432,764 |  |  |  | - |

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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