FINANCIAL INSTRUMENTS	9 Months Ended
FINANCIAL INSTRUMENTS	Jun. 30, 2011
Investments, All Other Investments [Abstract]
Concentration Of Risk and Foreign Exchange Risk Disclosure [Text Block]	NOTE 4 — FINANCIAL INSTRUMENTS The Company’s assets that are potentially subject to significant concentration of credit risk are primarily cash and cash equivalents, advance payments to suppliers and accounts receivable. The Company maintains cash deposits with financial institutions, which from time to time may exceed federally insured limits. The Company has not experienced any losses in connection with these deposits and believes it is not exposed to any significant credit risk from cash. At June 30, 2011 and September 30, 2010, the Company had approximately $82,000 and $82,000, respectively in excess of insured limits. Advance payments to suppliers are typically unsecured and arise from deposits paid in advance for future purchases of raw materials. The Company does not require collateral or other security against the prepayments to suppliers for raw materials. In the event of a failure by the Company’s suppliers to fulfill their contractual obligations and to the extent that the Company is not able to recover its prepayments, the Company would suffer losses. The Company’s prepayments to suppliers have been steadily decreasing due to the change in the industry practice from requiring full cash advance to secure key raw material (silicon wafers) as a result of the financial crisis in 2008 to requiring less or no cash advance during fiscal year 2009 as the economy is recovering from the crisis. The economic crisis may affect the Company’s customers’ ability to pay the Company for its products that the Company has delivered. If the customers fail to pay the Company for its products and services, the Company’s financial condition, results of operations and liquidity may be adversely affected. Other financial instruments that potentially subject the Company to concentration of credit risk consist principally of accounts receivable. Concentrations of credit risk with respect to accounts receivable are limited because a number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs credit evaluations for all new customers but generally does not require collateral to support customer receivables. All of the Company’s customers have gone through a very strict credit approval process. The Company diligently monitors the customers’ financial position. Payment terms for our solar module sales generally range from 0 to 60 days. In some cases, these terms are extended up to 200 days for certain qualifying customers of whom the Company applied rigorous credit requirements. The Company has also purchased insurance from the China Export & Credit Insurance Company to insure the collectability of the outstanding accounts receivable balances of a key customer. During the nine months ended June 30, 2011 and 2010, the Company had one and three customers, respectively that accounted for more than 10% of net sales. Foreign exchange risk and translation The Company may be subject to significant currency risk due to the fluctuations of exchange rates between the Chinese Renminbi, Euro and the United States dollar. The local currency is the functional currency for the China subsidiary. Assets and liabilities are translated at end of period exchange rates while revenues and expenses are translated at the average exchange rates in effect during the period. Equity is translated at historical rates and the resulting cumulative translation adjustments, to the extent not included in net income, are included as a component of other comprehensive income (loss) until the translation adjustments are realized. Included in other comprehensive income were foreign currency translation adjustment gains of $800,000 and $98,000 for the nine months ended June 30, 2011 and 2010, respectively. Foreign currency transaction gains and losses are included in earnings. For the nine months ended June 30, 2011 and 2010, the Company recorded foreign exchange losses of $0.5 million and $0.9 million, respectively.

SOLAR ENERTECH CORP 10-Q