Property, Plant and Equipment, net

12 Months Ended

Sep. 30, 2014

Property, Plant and Equipment, net [Text Block]

8. Property, Plant and Equipment, net

Property, plant and equipment as of September 30, 2013 and 2014 consisted of the following:

		2013			2014
Buildings	$	110,214,027		$	-
Machinery and equipment		125,617,004			-
Office equipment		2,520,480			19,999
Motor vehicles		1,722,492			118,821
		240,074,003			138,820
Accumulated depreciation		(123,715,978	)		(14,565	)
Carrying amount	$	116,358,025		$	124,255
Construction in progress		11,321,396			21,760,746
Prepayment for acquisition of property, plant and equipment		558,013			426,569
Carrying amount	$	11,879,409		$	22,187,315

(i) Depreciation expense for the years ended September 30, 2013 and 2014 is included in the consolidated statements of operations as follows:

		2013		2014
Cost of revenues	$	14,666,041	$	4,706,625
Research and development expenses		470,681		396,926
Sales and marketing expenses		132,312		84,194
General and administrative expenses		3,034,542		2,496,549
	$	18,303,576	$	7,684,294

(ii) Construction in progress

Construction in progress as of September 30, 2013 was mainly comprised of capital expenditures for the automation production line of BAK Tianjin. Construction in progress as of September 30, 2014 was mainly comprised of capital expenditures for the construction of the facilities and production lines of Dalian BAK Power.

For the years ended September 30, 2013 and 2014, the Company capitalized interest of $1,678,489 and $388,798 respectively to the cost of construction in progress.

(iii) Impairment charge

During the course of the Company’s strategic review of its operations, the Company assessed the recoverability of the carrying value of certain property, plant and equipment which resulted in impairment losses of $62.5 million and nil for the years ended September 30, 2013 and 2014, respectively. The impairment charge represented the excess of carrying amounts of the Company’s property, plant and equipment over the estimated fair value of the Company’s production facilities in Shenzhen primarily for the production of aluminum-case cells and lithium polymer cells and Tianjin primarily for the production of high-power lithium batteries.