Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jun. 30, 2014 |
Accounting Policies [Abstract] | ' |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation |
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The consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). |
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The consolidated interim financial information as of June 30, 2014 and for the six and three months ended June 30, 2014 and 2013, were prepared without audit, pursuant to the rules and regulations of the SEC (“Security and Exchange Commission”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP are not included. The interim consolidated financial information should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, previously filed with the SEC. |
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In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company’s consolidated financial position as of June 30, 2014, its consolidated results of operations and cash flows for the six and three months ended June 30, 2014 and 2013, as applicable, were made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. |
Consolidation, Policy [Policy Text Block] | ' |
Principles of Consolidation |
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The accompanying consolidated financial statements include the accounts of SmartHeat’s U.S. parent, its subsidiaries Heat HP and Heat PHE, and their subsidiaries Taiyu, SanDeKe, SmartHeat Siping, Jinhui, SmartHeat Investment, SmartHeat Shenyang Energy, SmartHeat Trading, Ruicheng, SmartHeat Germany, SmartHeat Shenyang Heat Pump, and Heat Exchange, which are collectively referred to as the “Company.” All significant intercompany accounts and transactions were eliminated in consolidation. After the sale of 40% equity interest of Taiyu, Siping, Shenyang Energy, Ruicheng and Xinrui (See Note 9) on December 30, 2013, the Company now owns 60% of Taiyu, Siping and Shenyang Energy, and 30.6% of Ruicheng, which is accounted for under the equity method of accounting. |
Equity Method Investments, Policy [Policy Text Block] | ' |
Equity Method Investee |
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Prior to the sale of 40% equity interest of Taiyu, Siping, Shenyang Energy, Ruicheng and Xinrui, the Company owned 46% of XinRui and accounts for this investment under the equity method of accounting (ASC 323-30). The Company recorded its investment at original cost. This investment increased with income and decreased for dividends and losses that accrued to the Company. After 40% equity interest sale on December 30, 2013, the Company now owns 30.6% of Ruicheng (See Note 9) and 27.6% of XinRui, which are accounted for under the equity method of accounting. |
Use of Estimates, Policy [Policy Text Block] | ' |
Use of Estimates |
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In preparing the financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates. |
Cash and Cash Equivalents, Policy [Policy Text Block] | ' |
Cash and Equivalents |
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For purposes of the statement of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of June 30, 2014 and December 31, 2013, the Company maintained restricted cash deposit in several bank accounts for the purposes described below. |
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| | 2014 | | | 2013 | | | | | | | | | |
| | (In millions) | | | | | | | | | |
Support of performance guarantee | | $ | 0.46 | | | $ | 1.16 | | | | | | | | | |
Support of bank acceptance | | | - | | | | 1.29 | | | | | | | | | |
Support of letter of credit | | | 0.21 | | | | 0.01 | | | | | | | | | |
Total restricted cash - current | | $ | 0.67 | | | $ | 2.46 | | | | | | | | | |
Performance guarantee -- noncurrent | | $ | 0.32 | | | $ | 0.14 | | | | | | | | | |
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The following table presents in U.S. dollars (“USD”) the amount of cash and equivalents held by the Company as of June 30, 2014 and December 31, 2013, based on the jurisdiction of deposit. The Company’s U.S. parent holds cash and equivalents in U.S. bank accounts denominated in USD. |
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| | United States | | | China | | | Germany | | | Total | |
30-Jun-14 | | $ | 244,035 | | | $ | 17,767,302 | | | $ | 985,280 | | | $ | 18,996,617 | |
31-Dec-13 | | $ | 251,461 | | | $ | 11,326,282 | | | $ | 2,024,656 | | | $ | 13,602,399 | |
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As of June 30, 2014, Taiyu had RMB 10 million ($1.63 million) deposited in a commercial bank as an investment to the financial product with term from June 20, 2014 to July 23, 2014 and annual yield between 4.5% to 4.7% depending on CSI 300 index at the observation date. SmartHeat Energy had RMB 45 million ($7.31 million) deposited in a commercial bank as an investment to the financial product with term from June 26, 2014 to July 28, 2014 and annual yield of 5.4%. |
Receivables, Policy [Policy Text Block] | ' |
Accounts and Retentions Receivable |
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The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Based on historical collection activity, the Company had allowances of $41.29 million and $48.25 million at June 30, 2014 and December 31, 2013, respectively. |
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At June 30, 2014 and December 31, 2013, the Company had retentions receivable from customers for product quality assurance of $3.92 and $4.44 million, respectively. The retention rate varies from 5% to 20% of the sales price with variable terms from 3 to 24 months depending on the shipping date, and for PHE Units, the customer acceptance date, of the products and the number of heating seasons that the warranty period covers. The Company had allowances of $1.56 million and $0 at June 30, 2014 and December 31, 2013, respectively. |
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Accounts receivable is net of unearned interest of $26,413 and $26,655 at June 30, 2014 and December 31, 2013, respectively. Unearned interest is imputed interest on accounts receivable with due dates over 1 year from the invoice date discounted at the Company’s borrowing rate of 6.15% at December 31, 2012. The Company did not record additional unearned interest after December 31, 2012 due to no long-term accounts receivable. |
Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block] | ' |
Bad Debt Allowance |
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The Company records approximately 50% of accounts receivable aged over 180 days from the payment due date and 100% accounts receivable aged over 360 days from the payment due date as bad debt allowance. Management of the Company’s subsidiaries further analyzes each individual customer for which it was taken a bad debt allowance to further assess the likelihood of collectability. Customers which are either state-owned or have a history of support from the state, or larger companies with long operating histories, that management of the Company’s subsidiaries believe the chance of non-payment will be remote, are excluded for the purpose of calculating bad debt allowance. |
Advances to Suppliers [Policy Text Block] | ' |
Advance to Suppliers |
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The Company makes advances to certain vendors to purchase raw material and equipment for production. The advances are interest-free and unsecured. |
Inventory, Policy [Policy Text Block] | ' |
Inventories |
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Inventories are valued at the lower of cost or market, with cost determined on a moving weighted-average basis. The difference is recorded as a cost of goods sold, if the current market value is lower than their historical cost. In addition, the Company makes an inventory impairment provision analysis at each period end for inventory held over 360 days. Cost of work in progress and finished goods comprises direct material, direct labor and an allocated portion of production overheads. |
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Certain raw materials, such as stainless steel products, plates, shims, gaskets, and pump valves, require longer than normal procurement periods, or “lead times,” with some procurement periods running longer than six months. To guarantee availability of raw materials for production and sales, the Company’s subsidiaries, based on historical sale patterns, estimate and purchase material for the upcoming period. |
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As part of inventory impairment analysis, the Company performs an evaluation of raw materials stored over one year and not anticipated to be consumed, and an evaluation of potential impairment to the quality of these raw materials. If management anticipates that obsolete raw materials in inventory can be utilized and will be consumed within the next six months through new customer orders or substitute orders, no impairment is recorded. The Company collects information about delayed and canceled contracts and met with affected customers to discuss their financing situation and their projections of future orders. Finished goods manufactured for delayed and canceled contracts that the Company does not expect to be reinstated and contracts for which the Company has been unable to find substitute customers become impaired. |
Property, Plant and Equipment, Policy [Policy Text Block] | ' |
Property and Equipment |
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Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method with a 10% salvage value and estimated lives as follows: |
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Buildings | 20 years | | | | | | | | | | | | | | | |
Vehicles | 5 years | | | | | | | | | | | | | | | |
Office equipment | 5 years | | | | | | | | | | | | | | | |
Production equipment | 5-10 years | | | | | | | | | | | | | | | |
Land Use Rights [Policy Text Block] | ' |
Land Use Rights |
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Right to use land is stated at cost less accumulated amortization. Amortization is provided using the straight-line method over 50 years. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' |
Impairment of Long-Lived Assets |
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Long-lived assets, which include tangible assets, such as property, plant and equipment, goodwill and other intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. |
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Recoverability of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized based on the excess of the carrying amount over the fair value (“FV”) of the assets. FV generally is determined using the asset’s expected future discounted cash flows or market value, if readily determinable. |
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On December 30, 2013, the Company closed the transaction contemplated by the Equity Interest Purchase Agreement dated October 10, 2013, whereby the buyers purchased 40% of the Company’s equity interests in the following PHE segment subsidiaries (“Target Companies”): Taiyu, Siping, SmartHeat Energy, Ruicheng and XinRui for the purchase price of RMB 5,000,000 ($0.82 million) (See Note 1). The buyers had the option to purchase an additional 40% equity interest in the Target Companies for an additional purchase price of RMB 6,000,000 which was exercised on March 27, 2014 subject to the approval of the Company’s shareholders prior to completing the sale. Should the Company’s shareholders approve the sale, the Company has the option to require the Buyers to purchase the remaining 20% equity interest for a purchase price of RMB 2,500,000. |
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According to ASC 360-10-35, a long-lived asset (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The Company believed the following events or changes in circumstances indicated the carrying amount of its long-lived assets (asset group) may not be recoverable: 1) a current expectation that, more likely than not, a long-lived assets (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life, and 2) A significant decrease in the market price of a long-lived asset (asset group). Since the Company has the option to sell 100% ownership in Target Companies for RMB 13.5 million ($2.21 million), a significant decrease in the market price, before the end of its previously estimated useful life for their long-lived assets, the Company therefore performed assets recoverability testing by comparing the assets estimated future undiscounted cash flows with their carrying value, and concluded the long-lived assets were not recoverable as a result of future cash flows are less than the carrying amount. The Company further calculated the impairment loss amount of Target Companies by determining the fair value for the long-lived asset group and recorded a write-down (loss) for the difference between their carrying value and their fair value. Fair value is an asset’s purchase or sale price in a current transaction between willing parties. The best evidence of fair value is prices quoted in active markets, although the Company has the option to sell 100% ownership in Target Companies for RMB 13.5 million ($2.21 million), the market prices are not available for many long-lived assets such as equipment, the Company therefore used discounted cash flow method for estimating fair value of long-lived assets which are acceptable under ASC 360-10. |
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Based on its evaluation, the Company believed, as of December 31, 2013, the long-lived assets of Target Companies including construction in progress, property and equipment, and intangible assets were impaired for $13.73 million. In addition, the Company retained remaining 30.6% and 27.6% interest in Ruicheng and XinRui (after the 40% sale), respectively, at December 31, 2013, that was accounted for under the equity method of accounting, the Company recorded the long-term investment in Ruicheng and XinRui at fair value as provided in ASC 323-10-30-2. The fair value of the long-term investment was the prorated selling price for the remaining 60% equity interest that are allocated to Ruicheng and XinRui for approximately $26,720; accordingly, the Company recorded $0.91 million impairment loss of long-term investment in Ruicheng and XinRui for the excess of the carrying amount over the fair value for the year ended December 31, 2013. |
Standard Product Warranty, Policy [Policy Text Block] | ' |
Warranties |
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The Company offers to all customers standard warranties on its products for one or two heating seasons depending on the terms negotiated. The Company accrues for warranty costs based on estimates of the costs that may be incurred under its warranty obligations. The warranty expense and related accrual is included in the Company’s selling expenses and other payables respectively, and is recorded when revenue is recognized. Factors that affect the Company’s warranty liability include the number of units sold, its estimates of anticipated rates of warranty claims, costs per claim and estimated support labor costs and the associated overhead. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. |
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Activity in the Company’s warranty reserve from January 1, 2013, to June 30, 2014, is as follows: |
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| | 2014 | | | 2013 | | | | | | | | | |
Beginning balance | | $ | 472,558 | | | $ | 517,076 | | | | | | | | | |
Provisions | | | 406,625 | | | | 331,989 | | | | | | | | | |
Actual costs incurred | | | (175,030 | ) | | | (376,507 | ) | | | | | | | | |
Ending balance in current liabilities (Note 13) | | $ | 560,924 | | | $ | 472,558 | | | | | | | | | |
Research and Development Expense, Policy [Policy Text Block] | ' |
Research and Development Costs |
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Research and development (“R&D”) costs are expensed as incurred and included in general and administrative expenses. These costs primarily consist of cost of materials used, salaries paid for the Company’s development department and fees paid to third parties. R&D costs for the six months ended June 30, 2014 and 2013, were $403,917 and $238,053, respectively. R&D costs for the three months ended June 30, 2014 and 2013, were $246,546 and $115,616, respectively. |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition |
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The Company’s revenue recognition policies comply with SEC Staff Accounting Bulletin (“SAB”) 104 (codified in FASB ASC Topic 605). Sales revenue is recognized when PHEs, heat meters and heat pumps are delivered, and for PHE Units when customer acceptance occurs, the price is fixed or determinable, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition met are recorded as unearned revenue under “Advance from customers.” |
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The Company’s sales generally provide for 30% of the purchase price on placement of an order, 30% on delivery, 30% upon installation and acceptance of the equipment after customer testing and 10% no later than the termination of the standard warranty period, which ranges from 3 to 24 months from the acceptance date. |
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Due to the slowdown of the Chinese economy and tightened monetary policy, and to attract and retain customers, the Company’s subsidiaries adjusted their contract and payment terms to permit more flexible and longer payment terms. |
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Sales revenue is the invoiced value of goods, net of value-added tax (“VAT”). All of the Company’s products sold in the PRC are subject to a VAT of 17% of gross sales price. This VAT may be offset by the VAT paid by the Company on raw materials and other materials purchased in China and included in the cost of producing the Company’s finished product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The Company files VAT tax returns on line with PRC tax authorities and offsets the payables against the receivables. SmartHeat Germany, the Company’s German subsidiary, is subject to 19% VAT. |
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Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government. VAT taxes are not affected by the income tax holiday. |
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Sales returns and allowances were $0 for the six and three months ended June 30, 2014 and 2013. The Company does not provide a right of return, price protection or any other concessions to its customers. |
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The Company provides a standard warranty to all customers, which is not considered an additional service; rather, an integral part of the product’s sale. The Company believes the existence of its standard product warranty in a sales contract does not constitute a deliverable in the arrangement and thus there is no need to apply the EITF 00-21 (codified in FASB ASC Topic 605-25) separation and allocation model for a multiple deliverable arrangement. SFAS 5 (codified in FASB ASC Topic 450) specifically addresses the accounting for standard warranties and neither SAB 104 nor EITF 00-21 supersedes SFAS 5. The Company believes that accounting for its standard warranty pursuant to SFAS 5 does not impact revenue recognition because the cost of honoring the warranty can be reliably estimated. |
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The Company charges for after-sales services provided after the expiration of the warranty period, with after-sales services mainly consisting of cleaning PHEs and repairing and exchanging parts. The Company recognizes such revenue when the service is provided. For the six months ended June 30, 2014 and 2013, revenue from after-sales services after the expiration of the warranty period was $93,784 and $129,406, respectively. For the three months ended June 30, 2014 and 2013, revenue from after-sales services after the expiration of the warranty period was $47,540 and $47,776, respectively, which was recorded in other income. |
Cost of Sales, Policy [Policy Text Block] | ' |
Cost of Goods Sold |
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Cost of goods sold (“COGS”) consists primarily of material costs and direct labor and manufacturing overhead that are directly attributable to the products. Write-down of inventories to the lower of cost or market is also recorded in COGS. Company also records inventory reserve for inventories aging over 360 days to COGS. |
Customer Advances [Policy Text Block] | ' |
Advance from Customers |
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The Company records payments received from customers in advance of their orders to advance account. These orders normally are delivered within a reasonable period of time based upon contract terms and customer demand. |
Statement of Cash Flows [Policy Text Block] | ' |
Statement of Cash Flows |
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In accordance with SFAS No. 95, “Statement of Cash Flows,” codified in FASB ASC Topic 230, cash flows from the Company’s operations are calculated based upon the local currencies. As a result, amounts shown on the statement of cash flows may not necessarily agree with changes in the corresponding asset and liability on the balance sheet. |
Earnings Per Share, Policy [Policy Text Block] | ' |
Basic and Diluted Earnings (Loss) per Share (EPS) |
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Basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similarly, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted EPS are based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to have been exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. |
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Basic and diluted shares outstanding are the same for the six and three months ended June 30, 2014 and 2013, because the common stock equivalent of the convertible securities outstanding, consisting of unexercised options issued to the Company’s directors and an officer, are anti-dilutive and, accordingly, were excluded from the computation of diluted loss per share. At June 30, 2014 and December 31, 2013, options to purchase 2,500 shares of common stock were outstanding and exercisable, respectively. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' |
Foreign Currency Translation and Comprehensive Income (Loss) |
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The accounts of the U.S. parent company are maintained in USD. The functional currency of the Company’s China subsidiaries is the Chinese Yuan Renminbi (“RMB”) and the functional currency of SmartHeat Germany, the Company’s subsidiary in Germany, is the Euro (“EUR”). The accounts of the China subsidiaries and German subsidiary were translated into USD in accordance with SFAS No. 52, “Foreign Currency Translation” (codified in FASB ASC Topic 830). According to SFAS No. 52, all assets and liabilities were translated at the exchange rate on the balance sheet date, stockholders’ equity was translated at the historical rates and statement of operations items were translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with SFAS No. 130, “Reporting Comprehensive Income” (codified in FASB ASC Topic 220). |
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The RMB to USD exchange rates and EUR to USD exchange rates in effect as of June 30, 2014 and December 31, 2013, and the average exchange rates for the six months ended June 30, 2014 and 2013 are as following. The exchange rates used in translation from RMB to USD were published by State Administration of Foreign Exchange of the People’s Republic of China (“SAFE”). The exchange rates used in translation from EUR to USD were published by OANDA Rates. |
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| | Average Exchange Rate | | | Balance Sheet Date | |
| | For the Six Months Ended | | | Exchange Rate | |
| | 6/30/14 | | | 6/30/13 | | | 6/30/14 | | | 12/31/13 | |
RMB - USD | | | 6.118 | | | | 6.2413 | | | | 6.1528 | | | | 6.0969 | |
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EUR - USD | | | 0.7295 | | | | 0.7616 | | | | 0.7329 | | | | 0.7263 | |
Segment Reporting, Policy [Policy Text Block] | ' |
Segment Reporting |
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FASB ASC Topic 280, Disclosures about Segments of an Enterprise and Related Information, requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. |
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The Company has two operating segments: 1) plate heating equipment, meters and related products; and 2) heat pumps and related products. These operating segments were determined based on the nature of the products offered. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company's chief executive officer and acting chief accountant were identified as the chief operating decision makers. The Company’s chief operating decision makers direct the allocation of resources to operating segments based on the profitability, cash flows, and other measurement factors of each respective segment. Historically they were not segmented because the heat pump business was relatively small compared to the plate heating business and both businesses reported to the same executives; however, the Company’s Board and senior management determined that it is useful and efficient to analyze and manage these businesses separately starting from 2013. |
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The Company evaluates performance based on several factors, of which the primary financial measure is business segment income before taxes. The following table shows the operations of the Company's reportable segments for the six months ended June 30, 2014 and 2013, and as of June 30, 2014 and December 31, 2013, respectively. |
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| | Six Months Ended June 30, | | | | | | | | | |
| | 2014 (Restated) | | | 2013 | | | | | | | | | |
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Revenue from unaffiliated customers: | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | 9,359,142 | | | $ | 11,808,874 | | | | | | | | | |
Heat pumps and related | | | 1,310,691 | | | | 2,082,549 | | | | | | | | | |
Consolidated | | $ | 10,669,833 | | | $ | 13,891,423 | | | | | | | | | |
Loss from operations: | | | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | (3,126,926 | ) | | $ | (19,942,874 | ) | | | | | | | | |
Heat pumps and related | | | (2,493,824 | ) | | | (1,866,988 | ) | | | | | | | | |
Corporation | | | (698,612 | ) | | | (442,687 | ) | | | | | | | | |
Consolidated | | $ | (6,319,362 | ) | | $ | (22,252,549 | ) | | | | | | | | |
Net loss from continuing operations before non-controlling: | | | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | (4,001,367 | ) | | $ | (20,406,465 | ) | | | | | | | | |
Heat pumps and related | | | (2,373,653 | ) | | | (1,433,574 | ) | | | | | | | | |
Corporation | | | (525,185 | ) | | | (484,359 | ) | | | | | | | | |
Consolidated | | $ | (6,900,205 | ) | | $ | (22,324,398 | ) | | | | | | | | |
Depreciation and amortization: | | | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | 135,628 | | | $ | 771,634 | | | | | | | | | |
Heat pumps and related | | | 242,495 | | | | 234,432 | | | | | | | | | |
Corporation | | | 75,101 | | | | 65,381 | | | | | | | | | |
Consolidated | | $ | 453,224 | | | $ | 1,071,447 | | | | | | | | | |
Total assets: | | | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | 108,731,871 | | | $ | 113,919,061 | | | | | | | | | |
Heat pumps and related | | | 41,671,724 | | | | 13,674,622 | | | | | | | | | |
Corporation | | | 3,191,074 | | | | 3,374,858 | | | | | | | | | |
Inter-segment elimination | | | (47,415,620 | ) | | | (16,153,739 | ) | | | | | | | | |
Consolidated | | $ | 106,179,049 | | | $ | 114,814,802 | | | | | | | | | |
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The following table shows the operations of the Company's reportable segments for the three months ended June 30, 2014 and 2013, respectively. |
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| | Three Months Ended June 30, | | | | | | | | | |
| | 2014 (Restated) | | | 2013 | | | | | | | | | |
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Revenue from unaffiliated customers | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | 4,974,000 | | | $ | 6,137,081 | | | | | | | | | |
Heat pumps and related | | | 735,867 | | | | 1,585,911 | | | | | | | | | |
Consolidated | | $ | 5,709,867 | | | $ | 7,722,992 | | | | | | | | | |
Operating income (loss): | | | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | 8,626,665 | | | $ | (8,528,664 | ) | | | | | | | | |
Heat pumps and related | | | (1,361,240 | ) | | | (641,294 | ) | | | | | | | | |
Corporation | | | (171,785 | ) | | | (269,493 | ) | | | | | | | | |
Consolidated | | $ | 7,093,640 | | | $ | (9,439,451 | ) | | | | | | | | |
Net income (loss) before non-controlling: | | | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | 7,899,565 | | | $ | (8,806,823 | ) | | | | | | | | |
Heat pumps and related | | | (1,307,874 | ) | | | (379,331 | ) | | | | | | | | |
Corporation | | | 58,624 | | | | (269,628 | ) | | | | | | | | |
Consolidated | | $ | 6,650,315 | | | $ | (9,455,782 | ) | | | | | | | | |
Depreciation and amortization: | | | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | 41,357 | | | $ | 388,967 | | | | | | | | | |
Heat pumps and related | | | 4,875 | | | | 111,451 | | | | | | | | | |
Corporation | | | 21,514 | | | | 47,236 | | | | | | | | | |
Consolidated | | $ | 67,746 | | | $ | 547,654 | | | | | | | | | |
Total assets: | | | | | | | | | | | | | | | | |
Plate heating, meters and related | | $ | 108,731,871 | | | $ | 113,919,061 | | | | | | | | | |
Heat pumps and related | | | 41,671,724 | | | | 13,674,622 | | | | | | | | | |
Corporation | | | 3,191,074 | | | | 3,374,858 | | | | | | | | | |
Inter-segment elimination | | | (47,415,620 | ) | | | (16,153,739 | ) | | | | | | | | |
Consolidated | | $ | 106,179,049 | | | $ | 114,814,802 | | | | | | | | | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
New Accounting Pronouncements |
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In January 2014, FASB issued, Accounting Standards Update 2014-01, Investments—Equity Method and Joint Ventures (Topic 323), Accounting for Investments in Qualified Affordable Housing Projects. The objective of this Update is to provide guidance on accounting for investments by a reporting entity in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The amendments in this Update permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. The amendments in this Update should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The amendments in this Update are effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. The adoption of this ASU will not affect the Company’s financial statements. |
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In January 2014, FASB issued, Accounting Standards Update 2014-05, Service Concession Arrangements (Topic 853), The objective of this Update is to specify that an operating entity should not account for a service concession arrangement within the scope of this Update as a lease in accordance with Topic 840, Leases. Service concession arrangements may become more prevalent in the United States as public-sector entities seek alternative ways to provide public services on a more efficient and cost-effective basis. The amendments apply to an operating entity of a service concession arrangement entered into with a public-sector entity grantor when the arrangement meets certain conditions. The amendments in this Update should be applied on a modified retrospective basis to service concession arrangements that exist at the beginning of an entity’s fiscal year of adoption. The modified retrospective approach requires the cumulative effect of applying this Update to arrangements existing at the beginning of the period of adoption to be recognized as an adjustment to the opening retained earnings balance for the annual period of adoption. The amendments are effective for a public business entity for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The adoption of this ASU will not affect the Company’s financial statements. |
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As of June 30, 2014, there is no recently issued accounting standards not yet adopted that would have a material effect on the Company’s consolidated financial statements. |
Reclassification, Policy [Policy Text Block] | ' |
Reclassification |
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Certain prior year amounts were reclassified to conform to the manner of presentation in the current period, which includes the reclassification of a $2.99 million advance from customers to other payable in the balance sheet. |