CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK

12 Months Ended

Dec. 31, 2012

CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK [Abstract]

CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK

NOTE 2 – CHANGE IN ACCOUNTING PRINCIPLE FOR INVESTMENT IN AMAK

As discussed in Note 10, in 2012 the Company determined that changes in the level of its participation in the management of AMAK now indicated that the Company had significant influence over the financial and operating policies of AMAK.  Accordingly, the Company changed from the cost method of accounting for its investment in AMAK to the equity method of accounting for the investment.  In accordance with ASC 323-10-35-33, the financial statements for the prior periods have been retrospectively restated to account for the investment in AMAK for all periods.

The effects of the retrospective application of the equity method of accounting to 2011 are as follows:

	December 31, 2011
	As Reported		As Restated
	(thousands of dollars)
Consolidated Balance Sheet
Investment in AMAK	$	30,884	$	38,105
Total assets		110,612		117,833
Deferred income tax liability – long term		7,016		9,394
Total liabilities		44,374		46,751
Retained earnings		20,187		25,030
Total Arabian American Development Company stockholders' equity		65,949		70,793
Total equity		66,238		71,082
Total liabilities and equity		110,612		117,833

	December 31, 2011
	As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Income
Equity in loss of AMAK	$	-	$	1,018
Gain from additional equity issued by AMAK		-		8,850
Income before income tax expense		12,557		20,389
Income tax expense		4,127		6,505
Net income		8,430		13,884
Net income attributable to Arabian American Development Company		8,430		13,884
Net income per common share
Basic	$	0.35	$	0.58
Diluted	$	0.35	$	0.57

	December 31, 2011
	As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Stockholders' Equity
Comprehensive income	$	8,419	$	13,872

	December 31, 2011
	As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Cash Flows
Operating activities
Net income attributable to Arabian American Development Company	$	8,430	$	13,884
Deferred income taxes		860		3,238
Equity in loss of AMAK		-		1,018
Gain from additional equity issued by AMAK		-		(8,850	)

The effects of the retrospective application of the equity method of accounting to 2010 are as follows:

	December 31, 2010
	As Reported		As Restated
	(thousands of dollars)
Consolidated Balance Sheet
Investment in AMAK	$	30,884	$	30,273
Total assets		92,528		91,917
Retained earnings		11,756		11,145
Total Arabian American Development Company stockholders' equity		56,551		55,940
Total equity		56,840		56,230
Total liabilities and equity		92,528		91,917

	December 31, 2010
	As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Income
Equity in loss of AMAK	$	263	$	874
Income before income tax expense		4,388		3,778
Net income		2,686		2,075
Net income attributable to Arabian American Development Company		2,686		2,075
Net income per common share
Basic	$	0.11	$	0.09
Diluted	$	0.11	$	0.09

	December 31, 2010
	As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Stockholders' Equity
Comprehensive income	$	2,790	$	2,180

	December 31, 2010
	As Reported		As Restated
	(thousands of dollars)
Consolidated Statement of Cash Flows
Operating activities
Net income attributable to Arabian American Development Company	$	2,686	$	2,075
Equity in loss of AMAK		263		874

AMAK's activities through December 31, 2009, were limited to the construction of facilities to begin the commercial development of the interests.  As a result, AMAK did not have significant income or loss through December 31, 2009, and the change to the equity method of accounting had no effect on the January 1, 2010, beginning balance of retained earnings.