DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2011

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

21.

DISCONTINUED OPERATIONS

In order to improve its cash flows from operations and working capital, the Company decided to redeploy its capital to meet requirements of its business plan. On December 29, 2010, the Company classified its subsidiary Wuhan Sungreen as a discontinued operation. Accordingly, Wuhan Sungreen’s operations have been classified as discontinued operations in the consolidated statements of income and cash flows and the assets and associated liabilities have been classified as held for sale in the consolidated balance sheets. The Company reviewed its Wuhan Sungreen assets and plans to sell these assets for approximately $20 million before 2012. Proceeds from the sales of Wuhan Sungreen assets will be used for working capital for Wuhan Blower and Wuhan Generating and potentially purchasing of equipment.

In accordance with SFAS No. 144 (ASC 360-10), “Accounting for the Impairment or Disposal of Long-lived Assets” (“SFAS 144”), the results of Wuhan Sungreen operations have been excluded from continuing operations and reported as discontinued operations for the current and prior periods. Furthermore, the assets of Wuhan Sungreen have been reclassified as held for sale in the Balance Sheet for prior periods. On December 29, 2010, the Company assessed its long-lived assets in Wuhan Sungreen based on the best estimation per the revenue guidance and current profit gross margin and determined that no write-down is necessary because undiscounted cash flow is substantially more than the carrying values of the assets.

The following table summarizes the amounts included in income/(loss) from discontinued operations for all periods presented. These revenues and expenses were historically reported under Wuhan Sungreen operating segment, and are now reported in discontinued operations:

Discontinued Operations	12/31/2011			12/31/2010
For the year ended	Wuhan			Wuhan
	Sungreen			Sungreen
Sales	$	705,894		$	913,564
Cost of Sales		516,033			688,498
Gross Profit		189,861			225,066

Operating Expenses		679,218			587,418

Other Income (Expenses)		(148,019	)		69,019

Earnings before Taxes		(637,376	)		(293,333	)

Deferred tax expense/(benefit)		288,942			(72,778	)

Net Income (Loss)	$	(926,318	)	$	(220,555	)

The following table summarizes the amounts included in financial position from discontinued operations for all periods presented. These amounts included in financial position were historically reported under Wuhan Sungreen operating segment, and are now reported in discontinued operations:

Financial Position	December 31, 2011		December 31, 2010
At	Wuhan		Wuhan
		Sungreen		Sungreen
Current Assets	$	2,223,395	$	1,756,460
Non Current Assets		24,672,213		24,215,927
Total Assets		26,895,608		25,972,387

Current Liabilities		1,401,330		726,232
Total Long Term Liabilities		-		-
Total Liabilities		1,401,330		726,232

Net Assets		25,494,278		25,246,155

Total Liabilities & Net Assets	$	26,895,608	$	25,972,387

The tax effects of temporary differences caused the deferred assets/(liabilities) associated with assets held for sale at December 31, 2011 and 2010 are as follows:

	12/31/2011		12/31/2010
Non-current deferred tax assets	$	-	$	291,132
Loss carryover items net of valuation allowance		-		(8,234	)
Total deferred tax assets		-		282,898
Non-current deferred tax liabilities		-		-
Total deferred tax liabilities		-		-
Net deferred tax assets	$	-	$	282,898

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

+ References

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+ Details

WUHAN GENERAL GROUP (CHINA), INC 10-K/A