Impairments

We measure certain assets and liabilities at fair value on a nonrecurring basis, including long-lived assets that have been reduced to fair value when they are held for sale and long-lived assets that are written down to fair value when they are impaired.

We evaluate the carrying amount of long-lived assets held and used in the business periodically and when facts and circumstances indicate that an impairment may exist. A long-lived asset group is considered impaired when the carrying value of the asset group exceeds its fair value. The impairment loss recognized is the excess of carrying value above its fair value. The estimation of fair value requires significant judgment regarding future restaurant performance and market-based real estate appraisals. To estimate fair value for locations where we own the land and building, we obtain appraisals from third-party real estate valuation firms based on sales of comparable properties in the same area as our restaurant location, which we believe approximates fair value. We use discounted future cash flows to estimate fair value of long-lived assets for our leased locations. Our weighted average cost of capital is used as the discount rate in our fair value measurements for leased locations, which is considered a Level 3 measurement. A reasonable change in this discount rate would not have a significant impact on these fair value measurements.

Impairment charges of $523 were recorded in the three months and six months ended October 28, 2016, related to one operating restaurant property where the value was determined to be lower than the carrying value. Impairment charges of $285 were recorded in the three months and six months ended October 23, 2015, related to two nonoperating restaurant properties where the respective fair values were determined to be lower than the carrying values.



	Three Months Ended						Six Months Ended
	October 28, 2016			October 23, 2015			October 28, 2016			October 23, 2015
Bob Evans Restaurants
Assets held and used	$	523	(1)	$	147	(2)	$	523	(1)	$	147	(2)
Assets held for sale	$	—		$	138	(3)	$	—		$	138	(3)

⁽¹⁾ Relates to one operating location

⁽²⁾ Relates to one nonoperating location

⁽³⁾ Relates to one nonoperating location

Impairment of Note Receivable: Subsequent to the end of our second quarter in fiscal 2017, in accordance with the provisions of the note receivable ("the Note") obtained in conjunction with the sale of Mimi’s Café , management determined that full collectability under the terms of the Note was no longer probable. As a result, the Company re-evaluated the cash flows expected to be received from the Note. Based on the revised expected cash flows, the Company recorded an impairment reserve of $16,000 in the second quarter of fiscal 2017 which represents the difference between the previous carrying value and the revised expected cash flows. In accordance with the provisions of ASC 310 - Receivables, the Company will continue to evaluate the expected cash flows throughout the remaining term of the Note.

The Note is recorded on the notes receivable line of the Consolidated Balance sheet, and is $6,256 and $20,886 as of October 28, 2016, and April 29, 2016, respectively.