NOTE 8 - GOODWILL

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 8 - GOODWILL

NOTE 8 - GOODWILL

On January 23, 2008, the Company completed its acquisition of 90% equity interest in Guangzhou Xinchen Water Company Limited from Fortune Luck Global International Limited for a consideration of $13.45 million. Goodwill, which is equal to the excess of cost over the fair value of acquired assets, has been recorded in conjunction with the acquisition. Goodwill is accounted for in accordance with ASC 350 (formerly SFAS 142). Under ASC 350, goodwill is not amortized and is subject to impairment test, at least annually, when events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The test of goodwill impairment consists of two steps. First, the identification of potential impairment is performed by comparing the fair value of the reporting unit to its carrying amount, including goodwill. The Company estimates the fair value of the reporting unit using a discounted cash flow (“DCF”) model. Second, if there is impairment identified in the first step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with ASC 450-10 (formerly SFAS No 141(R)), “Business Combinations”. As of December 31, 2011, the Company’s evaluation of goodwill resulted in an impairment loss of $472,984. The following table provides a reconciliation of the beginning and ending carrying amounts of goodwill for the years ended December 31, 2011 and 2010:

	2011	2010
Goodwill at January 1	$  6,128,051	$ 13,178,494
Goodwill, net of accumulated impairment losses	6,128,051	13,178,494
Impairment losses during the year	472,984	7,499,608
Goodwill, net of impairment losses at December 31	5,655,067	5,678,886
Foreign currency exchange adjustment	512,047	449,165
Adjusted goodwill at December 31	$ 6,167,114	$ 6,128,051