Property and Equipment
|9 Months Ended|
Sep. 30, 2019
|Property, Plant and Equipment [Abstract]|
|Property and Equipment||
NOTE 5 - Property and Equipment
As of September 30, 2019 and December 31, 2018, the balances of property and equipment were as follows:
As of September 30, 2019, the balance of construction in progress was $0 after the Company transferred $416,231 (unaudited) to R&D expenses.
On May 1, 2018, the Company and Aerkomm Taiwan entered into a binding memorandum of understanding with Tsai Ming-Yin (the "Seller") with respect to the acquisition by Aerkomm Taiwan of a parcel of land located in Taiwan. The land is expected to be used to build a satellite ground station and data center. On July 10, 2018, the Company, Aerkomm Taiwan and the Seller entered into a certain real estate sales contract regarding this acquisition. Pursuant to the terms of the contract, and subsequent amendments on July 30, 2018, September 4, 2018, November 2, 2018 and January 3, 2019, the Company paid to the seller in installments refundable prepayment of $33.85 million as of December 31, 2018. On July 2, 2019, the Company paid the remaining purchase price of $624,462. As of September 30, 2019, the estimated commission payable for the land purchase in the amount of $1,360,770 (unaudited) was recorded to the cost of land and the payment to be paid after the full payment of the Land acquisition price until no later than December 31, 2020.
Depreciation expense was $136,449 (unaudited) and $42,895 (unaudited) for the three-month periods ended September 30, 2019 and 2018 and $409,757 (unaudited) and $87,030 (unaudited) for the nine-month periods ended September 30, 2019 and 2018, respectively.
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://fasb.org/us-gaap/role/ref/legacyRef