Pure Cycle Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 3 - Investments in Water, Water Systems, Land and Improvements

Note 3 - Investments in Water, Water Systems, Land and Improvements

6 Months Ended

Feb. 29, 2012

Cost-method Investments, Description [Text Block]

NOTE 3 INVESTMENTS IN WATER, WATER SYSTEMS, LAND AND IMPROVEMENTS

The Companys water rights and current water and wastewater service agreements are more fully described in Note 4 to the 2011 Annual Report. There have been no significant changes to the Companys water rights or water and wastewater service agreements during the three and six months ended February 29, 2012.

The Companys water, water systems, land and improvements consist of the following costs and accumulated depreciation and depletion at February 29, 2012 and August 31, 2011:

	February 29, 2012					August 31, 2011
	Costs		Accumulated Depreciation and Depletion			Costs		Accumulated Depreciation and Depletion
Arkansas River Valley assets	$	81,318,800	$	(1,230,000	)	$	81,318,800	$	(1,144,100	)
Rangeview water supply		14,306,400		(6,700	)		14,299,700		(6,600	)
Paradise water supply		5,544,000					5,540,200
Sky Ranch water rights and other costs		3,915,200		(36,300	)		3,915,200		(21,800	)
Fairgrounds water and water system		2,899,900		(490,500	)		2,899,900		(446,400	)
Rangeview water system		167,700		(65,000	)		167,700		(62,400	)
Water supply other		25,600		(16,100	)		25,600		(13,700	)
Totals		108,177,600		(1,844,600	)		108,167,100		(1,695,000	)
Net investments in water and water systems	$	106,333,000				$	106,472,100

Sky Ranch land and improvements	$	3,786,600		(2,900	)	$	3,743,300
Total net investments in water, water systems, land and improvements	$	110,116,700				$	110,215,400

Capitalized terms in this section not defined herein are defined in Note 4 to the 2011 Annual Report.

Depletion and Depreciation. The Company recorded $100 of depletion charges during each of the three month periods ended February 29, 2012 and February 28, 2011, respectively. The Company recorded $200 of depletion charges during each of the six month periods ended February 29, 2012 and February 28, 2011, respectively. This related entirely to the Rangeview Water Supply. No depletion is taken against the Arkansas River water, Paradise Water Supply or Sky Ranch Water Supply because the water located at these locations are not yet being utilized for their intended purpose as of February 29, 2012.

The Company recorded $77,000 and $75,100 of depreciation expense during the three months ended February 29, 2012 and February 28, 2011, respectively. The Company recorded $152,700 and $150,200 of depreciation expense during the six months ended February 29, 2012 and February 28, 2011, respectively.

- Definition

The entire disclosure for investments accounted for under the cost-method. The carrying amount of such investments may be adjusted, for example, distributions in excess of cost (return of capital) or for other-than-temporary impairments. The cost method and lower-of-cost or market, an adaptation of the cost method, is generally followed for most investments in noncontrolled corporations, in some corporate joint ventures, and to a lesser extent in unconsolidated subsidiaries in which the entity does not have the ability to exercise significant influence.

+ References + Details