(11) Asset Impairment and Estimated Lease Termination and Other Closing Costs

In accordance with FASB Accounting Standards Codification for Property, Plant, and Equipment, we evaluate restaurant sites and long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of restaurant sites to be held and used is measured by a comparison of the carrying amount of the restaurant site to the undiscounted future net cash flows expected to be generated on a restaurant-by-restaurant basis. If a restaurant is determined to be impaired, the loss is measured by the amount by which the carrying amount of the restaurant’s assets exceeds its fair value. Fair value is estimated based on the best information available including estimated future cash flows, expected growth rates in comparable restaurant sales, remaining lease terms, discount rate and other factors. If these assumptions change in the future, we may be required to take additional impairment charges for the related assets. Considerable management judgment is necessary to estimate future cash flows. Accordingly, actual results could vary significantly from such estimates. Restaurant sites that are operating but have been previously impaired are reported at the lower of their carrying amount or fair value less estimated costs to sell. Following is a summary of these events for the three and six months ended July 3, 2016 and June 28, 2015.

Asset Impairment and Estimated Lease Termination and Other Closing Costs (in thousands):

			Three Months Ended		Six Months Ended
Restaurants		Reason	July 3, 2016		July 3, 2016

Held for Sale		Asset Impairment⁽¹⁾	$	868	$	868
Richmond, VA area		Costs for closed restaurants		14		19
Software		Asset Impairment⁽²⁾		171		171
Miscellaneous		Costs for closed restaurants		3		6
	Total		$	1,056	$	1,064



⁽¹⁾Asset impairment calculated at July 3, 2016 based upon anticipated sale of a Virginia restaurant.
⁽²⁾Asset impairment calculated at July 3, 2016 based upon decision not to implement new restaurant back of house software.

Asset Impairment and Estimated Lease Termination and Other Closing Costs (in thousands):

			Three Months Ended		Six Months Ended
Restaurants		Reason	June 28, 2015		June 28, 2015

Smithtown, NY		Asset impairment⁽¹⁾	$	935	$	935
Richmond, VA area		Costs for closed restaurants		36		128
Décor Warehouse		Asset impairment⁽²⁾		(13)		(10)
Eden Prairie, MN		Costs for closed restaurants⁽³⁾		(77)		(77)
	Total		$	881	$	976


⁽¹⁾Asset impairment calculated at June 28, 2015 based upon anticipated sale of Smithtown restaurant.
⁽²⁾The three months ended June 28, 2015 include approximately $13,000 in proceeds from the sale of the remaining inventory of the Décor Warehouse.
⁽³⁾The three months ended June 28, 2015 include approximately $115,000 in benefits from the recapture of deferred rent benefits.