Note 3 - Property and Equipment
|9 Months Ended|
Sep. 30, 2015
|Note 3 - Property and Equipment||
Note 3 Property and Equipment
Property and equipment are as follows:
Depreciation expense was approximately $133,000 and $151,000 for the nine months ended September 30, 2015 and 2014 respectively.
Commencing in June 2008, Asideros I purchased certain equipment for purposes of rapidly clearing the land, preparing the land for planting, and actually planting the Jatropha trees. The Company has capitalized farming equipment and costs related to the development of land for farm use in accordance with generally accepted accounting principles for accounting by agricultural producers and agricultural cooperatives. Plantation equipment is depreciated using the straight-line method over estimated useful lives of 5 to 15 years. Depreciation expense has been capitalized as part of plantation development costs through the date that the plantation becomes commercially productive. The initial plantations were deemed to be commercially productive on October 1, 2009, at which date the Company commenced the depreciation of plantation development costs over estimated useful lives of 10 to 35 years, depending on the nature of the development. Developments and other improvements with indefinite lives are capitalized and not depreciated. Other developments that have a limited life and intermediate-life plants that have growth and production cycles of more than one year are being depreciated over their useful lives once they are placed in service. The land, plantation development costs, and plantation equipment are located in Mexico.
During the quarter ended September 30, 2015, the Company entered into negotiations with a third party related to the potential sale of its farming operations in Mexico. Based on these negotiations, the Company has determined that the recoverability of certain of its capitalized costs were impaired. Accordingly, the Company recorded an impairment charge of approximately $6,700,000 based on the expected proceeds from the transaction. In connection with such transactions, the Company expects that it will also be able to eliminate all of the debt attributed to the Joint Venture Entity of approximately $12,000,000 (balances as of September 30, 2015) based on discussions with its joint venture partner.
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