REDUCTION OF CARRYING VALUE OF ASSETS

12 Months Ended

Sep. 30, 2011

REDUCTION OF CARRYING VALUE OF ASSETS

REDUCTION OF CARRYING VALUE OF ASSETS

11.       REDUCTION OF CARRYING VALUE OF ASSETS

During fiscal years 2011 and 2010, Barnwell reduced the carrying value of certain assets.  A breakdown of the reduction of the carrying value of assets as reported in the Consolidated Statements of Operations is as follows:

	Year ended September 30,
	2011		2010
Investment in residential parcels	$	689,000	$	1,578,000
Real estate held for sale	418,000		571,000
Investment in joint ventures	121,000		-
Total reduction of carrying value of assets	$	1,228,000	$	2,149,000

During the year ended September 30, 2010, due to changes in fair values for real estate in the Lot 4A Increment I area of Kaupulehu, North Kona, Hawaii, Barnwell recorded write-downs of $1,578,000 and $571,000 for its investment in residential parcels and real estate held for sale, respectively.  Barnwell recognized additional impairment losses of $689,000 and $418,000 during the year ended September 30, 2011 for its investment in residential parcels and real estate held for sale, respectively, primarily due to changes in fair values in the area of Kaupulehu 2007’s interests.

Kona Village Resort sustained considerable damage as a result of the March 11, 2011 tsunami generated by a 9.0-magnitude earthquake that took place off the coast of Japan and subsequently announced it would close indefinitely and lay off its employees.  As a result of the resort’s shutdown, Barnwell determined a write-off of its remaining investment in Kona Village Investors, LLC was necessary.  The write-off totaled $121,000 for the year ended September 30, 2011.  No reduction was necessary during the year ended September 30, 2010.