Investments in Unconsolidated Entities

12 Months Ended

Aug. 31, 2016

Investments in Unconsolidated Entities

Investments in Unconsolidated Entities

4. INVESTMENTS IN UNCONSOLIDATED ENTITIES

The Company’s ownership interest and carrying amounts of investments in unconsolidated entities as of August 31, 2016 and 2015 consist of the following (in thousands, except percentages):

	August 31, 2016				August 31, 2015
	Percentage				Percentage
	Ownership		Amount		Ownership		Amount
Equity method investments:
SILQ (Malaysia) Sdn. Bhd. (“SILQ”)	33	%	$	50	33	%	$	129
Xurui Guangdian Co., Ltd. (“China SemiLEDs”)	49	%		—	49	%		—
Cost method investments	Various			1,318	Various			1,885
Total investments in unconsolidated entities			$	1,368			$	2,014

There were no dividends received from unconsolidated entities through August 31, 2016.

Equity Method Investments

The Company and the other investor in SILQ, a joint venture in Malaysia which is engaged in the design, manufacture and sale of lighting fixtures and systems, each owned a 50% equity interest in SILQ in 2009. In January 2014, the Company participated in SILQ’s capital increase and contributed $76 thousand. Following the capital increase, the Company’s equity interest in SILQ was diluted from 50% to 49%, and consequently, the Company recognized a gain on dilution of its investment of $26 thousand. The dilution gain was recognized as additional paid in capital in the consolidated statement of changes in equity. In April 2014, the Company sold part of its equity interest in SILQ to the other investor for a cash consideration of $114 thousand and recognized a gain on sale of investment of $37 thousand. The gain was reported in the consolidated statements of operations in equity in losses from unconsolidated entities. Upon consummation of the sale, the Company’s equity interest in SILQ was reduced from 49% to 33%. The Company subsequently invested $130 thousand in SILQ’s capital increase in April 2014 and its equity interest remains unchanged. SILQ applied for dissolution in May 2016 and was in the process of being dissolved as of August 31, 2016. The carrying amount of the Company's investment in SILQ was reduced to its proportionate share of the net realizable value reported by SILQ.

The Company still owns a  49% equity interest in China SemiLEDs. However, this investment has a carrying amount of zero as a result of a previously recognized impairment.

Cost Method Investments

In the fourth quarter of fiscal 2016, management reviewed the operating performance and financial condition of the investees based on their latest available financial statements or other publicly available information or the investees’ plan of liquidation. Management considered the extent and duration of time to which the fair value of the investment has been less than its carrying amount, the financial condition of the investees and the prospect for recovery in the near term, and recognized an other-than-temporary impairment loss of $317 thousand and $280 thousand on its investments in LumenMax and Nanoteco respectively for the year ended August 31, 2016. No other-than-temporary impairment charge was recognized in the year ended August 31, 2015. The fair values of the Company’s cost method investments are not readily available. All cost method investments are assessed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable.