Intangible Assets

3 Months Ended

Mar. 31, 2013

NOTE 7 – INTANGIBLE ASSETS

There is no private ownership of land in China. Land is owned by the government and the government grants land use rights for specified terms. The Company’s land use rights have terms that expire in January 2058 through September 2061. The Company amortizes these land use rights over the term of the respective land use rights. The lease agreement does not have any renewal options.

The Company’s seed rights consist of purchased seed rights relating to produce two varieties of corn seed, Hengyu 218 and Hengyu 398 in Jilin province. The seed rights have a useful life of five years. The Company amortizes the seed rights on a straight-line basis over the useful life. At March 31, 2013 and December 31, 2012, intangible assets consisted of the following:

	Useful Life	March 31, 2013			December 31, 2012
Land use rights	50 Years	$	14,034,044		$	13,960,514
Seed rights	5 Years		636,780			633,302
Software	3 Years		5,199			-
Less: accumulated amortization			(701,554	)		(598,638	)
		$	13,974,469		$	13,995,178

Amortization of intangible assets attributable to future periods is as follows:

Twelve-month periods ending March 31:
2014	$	399,198
2015		399,198
2016		397,976
2017		386,853
2018		291,336
Thereafter		12,099,908
	$	13,974,469

For the three months ended March 31, 2013 and 2012, amortization expense amounted to $67,124 and $73,006, respectively. At March, 31, 2013, $ 32,438 of the seed right amortization cost was transferred to deferred inventory cost and the amount will be transferred to inventories at the time of seed harvests.

- Definition

The entire disclosure for all or part of the information related to intangible assets.

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GSP-2, INC. 10-Q