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ASSET IMPAIRMENTS | 9 Months Ended
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Dec. 31, 2016
Asset Impairment Charges [Abstract] |
ASSET IMPAIRMENTS |
(15) | ASSET IMPAIRMENTS
Management estimates the fair value of each vessel not expected to return to active service (considered Level 3, as defined by ASC 820, Fair Value Measurements and Disclosures) by considering items such as the vessel’s age, length of time stacked, likelihood of a return to active service, actual recent sales of similar vessels, among others. For vessels with more significant carrying values, we obtain an estimate of the fair value of the stacked vessel from third-party appraisers or brokers for use in our determination of fair value estimates. Due in part to the modernization of the company’s fleet more vessels that are being stacked are newer vessels that are expected to return to active service. Stacked vessels expected to return to active service are generally newer vessels, have similar capabilities and likelihood of future active service as other currently operating vessels, are generally current with classification societies in regards to their regulatory certification status, and are being actively marketed. Stacked vessels expected to return to service are evaluated for impairment as part of their assigned active asset group and not individually. The company reviews the vessels in its active fleet for impairment whenever events occur or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. In such evaluation, the estimated future undiscounted cash flows generated by an asset group are compared with the carrying amount of the asset group to determine if a write-down may be required. If an asset group fails the undiscounted cash flow test, the company estimates the fair value of each asset group and compares such estimated fair value, considered Level 3, as defined by ASC 820, Fair Value Measurements and Disclosures, to the carrying value of each asset group in order to determine if impairment exists. Similar to stacked vessels, management obtains estimates of the fair values of the active vessels from third party appraisers or brokers for use in determining fair value estimates. During the quarter ended December 31, 2016, the company recognized $84.1 million of impairments to the stacked vessel fleet. The number of vessels in the stacked fleet that were impaired during the quarter ended December 31, 2016 was 26 vessels. The fair value of vessels in the stacked fleet incurring impairment during the quarter was $219.9 million at December 31, 2016 (after having recorded impairment charges). Excluding leased vessels, a total of 80 vessels in the stacked fleet, representing $752.3 million of net book value at December 31, 2016, were not impaired during the quarter. During the quarter ended December 31, 2016 the company completed a review of the carrying values of vessels in the active fleet and recognized of $169.3 million of impairments. The number of vessels in the active fleet that were impaired during the quarter ended December 31, 2016 was 48 vessels. The fair value of vessels in the active fleet incurring impairment during the quarter was $303.6 million at December 31, 2016 (after having recorded impairment charges). Excluding leased vessels, a total of 92 vessels in the active fleet, representing $1.6 billion of net book value at December 31, 2016, were not impaired during the quarter. The total carrying value of 246 vessels (excluding leased vessels) in the stacked and active fleets at December 31, 2016 of $2.9 billion does not necessarily reflect the realizable value of such vessels if such vessels were disposed of on any expedited basis. The table below summarizes the combined fair value of the assets that incurred impairments during the quarters and nine-month periods ended December 31, 2016 and 2015, along with the amount of impairment.
|  | Quarter Ended |  |  | Nine Months Ended |
|  | December 31, |  |  | December 31, |
(In thousands) |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Number of vessels impaired during the period |  |  | 74 |  |  |  | 14 |  |  |  | 115 |  |  |  | 47 |
Number of ROVs impaired during the period |  |  | — |  |  |  | — |  |  |  | 8 |  |  |  | — |
Amount of impairment incurred |  | $ | 253,422 |  |  |  | 15,141 |  |  |  | 419,870 |  |  |  | 61,771 |
Combined fair value of assets incurring impairment |  |  | 523,495 |  |  |  | 90,010 |  |  |  | 813,851 |  |  |  | 244,310 |

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- Definition The entire disclosure for the details of the charge against earnings resulting from the aggregate write down of all assets from their carrying value to their fair value. Disclosure may also include a description of the impaired asset and facts and circumstances leading to the impairment, amount of the impairment loss and where the loss is located in the income statement, method(s) for determining fair value, and the segment in which the impaired asset is reported. + References No definition available. + Details
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