Other receivables and other receivable from termination of lease

9 Months Ended

Mar. 31, 2016

Other receivables and other receivable from termination of lease [Text Block]

Note 5 – Other receivables and other receivable from termination of lease

Other receivables from termination of lease

On February 29, 2016, the Company entered an agreement with a third party to terminate one operating lease for a concrete plant, which was originally effective from August 18, 2013 to August 17, 2021. Under the agreement, the fair value of net assets of the related operation was determined to be RMB13.7 million (approximately $2.1 million), and was settled for RMB11.2 million (approximately $1.7 million). The Company recognized approximately $0.4 million loss from the termination of lease for the three and nine months ended March 31, 2016. In compliance with the terms of the agreement, by April 30, 2016, the Company received no less than approximately $465,000, and the remaining of the consideration will be paid by December 31, 2016.

Other receivables and allowance for doubtful accounts consisted of the following:

		March 31,			June 30,
		2016			2015
Other receivables, current	$	2,968,653		$	3,483,549
Less: Allowance for doubtful accounts, current		(2,652,014	)		(2,403,362	)
Other receivables - current, net	$	316,639		$	1,080,187
Other receivable from termination of lease	$	1,756,616		$	-

As of the termination date, the book value of the net assets underlying the lease and the determination of the $0.4 million loss is as follows:

Total consideration	$	1,708,795
Net assets
Account receivables		5,055,125
Inventories		348,090
Fixed assets		443,515
Prepaid		48,138
Account payables		(2,952,200	)
Other payables		(820,297	)
Total net assets		2,122,371
Total		(413,576	)
Exchange rate effect		24,677
Loss	$	(388,899	)