Prepayments and Other Receivables

12 Months Ended

Sep. 30, 2014

Prepayments and Other Receivables [Text Block]

6. Prepayments and Other Receivables

Prepayments and other receivables as of September 30, 2013 and 2014 consisted of the following:

	Note		2013			2014
Consideration receivable (Note 9(b))		$	6,483,507		$	-
Value added tax recoverable			4,295,390			570,577
Prepayments for raw materials and others			3,466,177			-
Advance to an unrelated third party	(a)		1,169,798			-
Net assets of BAK Canada held by trustee	(b)		1,043,833			-
Advance to a related party	(c)		885,052			-
Staff advances			701,923			5,028
Prepaid operating expenses			292,049			2,750
Others			1,371,790			11,509
			19,709,519			589,864
Less: Allowance for doubtful accounts			(1,980,914	)		-
		$	17,728,605		$	589,864

(a)	Advance to an unrelated third party was interest-free, unsecured and repayable on demand.
(b)	BAK Canada filed for bankruptcy on March 28, 2013. As of September 30, 2013, its net assets were held under the custody of its trustee.
(c)	As of September 30, the Company advanced to Tianjin BAK New Energy Research Institute Co., Ltd (“Tianjin New Energy”), a related party under the common control of Mr. Xiangqian Li, the Company's CEO, an amount of $885,052 which was interest-free, unsecured and repayable on demand.
(d)	An analysis of the allowance for doubtful accounts is as follows:

		2013			2014
Balance at beginning of year	$	1,305,329		$	1,980,914
Provision for the year		1,100,035			23,536
Recovery for the year		(466,617	)		(25,071	)
Disposal of subsidiaries		-			(1,939,682	)
Foreign exchange adjustment		42,167			(39,697	)
Balance at end of year	$	1,980,914		$	-