PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2014

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	December 31,			December 31,
	2014			2013
Permit of land use	$	458,853		$	460,964
Building		11,279,704			2,494,623
Plant, machinery and equipment		28,358,694			6,671,620
Motor vehicle		150,976			151,670
Office equipment		268,521			229,210
Construction in progress		5,848			25,497,600
Total		40,522,596			35,505,687
Less: accumulated depreciation		(6,640,718	)		(5,264,350	)
Property and Equipment, net	$	33,881,878		$	30,241,337

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 building and machinery is in production and the facility is in use, the amount of construction in progress is moved into plant, machinery and equipment and depreciated. During the year ended December 31, 2014, an aggregate of approximately $25.5 million was reclassified from construction in progress to their respective property and equipment category as the assets were placed in service and depreciation commenced. A reconciliation of total interest cost incurred to interest expense as recognized in the consolidated statement of operations is as follows:

	For the Year
	Ended December 31,
	2014		2013
Total interest cost incurred	$	1,244,346	$	583,400
Interest cost capitalized		458,542		234,704
Interest expense	$	785,804	$	348,696

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 - 49
Plant, machinery and equipment		5 - 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, 2014 and 2013, depreciation expense was $1,399,396 and $846,512, respectively.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details