(16)	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, and 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 period from April 1, 2017 through July 31, 2017 (Predecessor), the company recognized $157.8 million of impairment charges on 73 vessels that were stacked. The fair value of vessels in the stacked fleet incurring impairment during the period from April 1, 2017 through July 31, 2017 (Predecessor) was $505.6 million (after having recorded impairment charges).

During the period from April 1, 2017 through July 31, 2017 (Predecessor) the company recognized $26.9 million of impairments on six vessels in the active fleet. The fair value of vessels in the active fleet incurring impairment during the period from April 1, 2017 through July 31, 2017 (Predecessor) was $66.2 million (after having recorded impairment charges).

As of the company’s emergence from Chapter 11 bankruptcy on July 31, 2017 the company significantly reduced the carrying values of it vessels and other assets and did not incur asset impairments during the period from August 1, 2017 to September 30, 2017.

The below tables summarize the combined fair value of the assets that incurred impairments, along with the amount of impairment.

		Successor		Predecessor
		Period from		Period from
		August 1, 2017		July 1, 2017		Three Months
		through		through		Ended
(In thousands)		September 30, 2017		July 31, 2017		September 30, 2016
Number of vessels impaired in the period			—		8		42
Number of ROVs impaired during the period			—		—		8
Amount of impairment incurred	$		—		21,325		129,562
Combined fair value of assets incurring impairment			—		29,339		322,550

		Successor		Predecessor
		Period from		Period from
		August 1, 2017		April 1, 2017		Six Months
		through		through		Ended
(In thousands)		September 30, 2017		July 31, 2017		September 30, 2016
Number of vessels impaired in the period			—		79		54
Number of ROVs impaired during the period			—		—		8
Amount of impairment incurred	$		—		184,748		166,448
Combined fair value of assets incurring impairment			—		571,821		477,950