Property, Plant and Equipment
|12 Months Ended|
Dec. 31, 2015
|Property, Plant and Equipment [Abstract]|
|PROPERTY, PLANT AND EQUIPMENT||
NOTE 11 – PROPERTY, PLANT AND EQUIPMENT
At December 31, 2015 and 2014, property, plant and equipment consisted of the following:
For the years ended December 31, 2015, 2014 and 2013, depreciation expense amounted to $6,353,055, $6,017,886 and $2,394,692, respectively, of which $6,120,248, $5,988,845 and $2,368,010, respectively, was included in cost of revenue and inventories, and the remainder was included in general and administrative expense, respectively.
The vessels under construction are not subject to depreciation. Upon completion of the construction, fishing vessels under construction balances will be reclassified to fishing vessels.
On June 26, 2015, the Company acquired 6 fishing vessels for the appraised fair market value of approximately $56.2 million from Fuzhou Yishun Deep-Sea Fishing Co., Ltd. (“Yishun”) and Fuzhou Honglong Ocean Fishery Co., Ltd. (“Hong Long”), two related parties under common control. Accordingly, the transaction between the Company and these two related parties was accounted as a common control transaction pursuant to ASC 805-50 and it related subsections. Based on Accounting Standards Codification (“ASC”) 805-50, the Company recorded the value of $0 as the cost of the vessels since the 6 vessels had been fully depreciated in Hong Long and Yishun’s books at the date of transfer. The balance of approximately $56.2 million above cost was treated as a return of capital in the equity accounts and was recorded as a reduction in additional paid-in capital.
At December 31, 2015 and 2014, the Company had 28 and 33 fishing vessels with net carrying amount of approximately $22.3 million and $28.6 million, respectively, pledged as collateral for its bank loans.
The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.
Reference 1: http://www.xbrl.org/2003/role/presentationRef