Impairment of Long-Lived Assets and Other Lease Charges

The Company reviews its long-lived assets, principally property and equipment, for impairment at the restaurant level. If an indicator of impairment exists for any of its assets, an estimate of the undiscounted future cash flows over the life of the primary asset for each restaurant is compared to that long-lived asset’s carrying value. If the carrying value is greater than the undiscounted cash flow, the Company then determines the fair value of the asset and if an asset is determined to be impaired, the loss is measured by the excess of the carrying amount of the asset over its fair value. For closed restaurant locations, the Company reviews the future minimum lease payments and related ancillary costs from the date of the restaurant closure to the end of the remaining lease term and records a lease charge for the lease liabilities to be incurred, net of any estimated sublease recoveries.

The Company determined the fair value of restaurant equipment, for those restaurants reviewed for impairment, based on current economic conditions and the Company’s history of using these assets in the operation of its business. These fair value asset measurements rely on significant unobservable inputs and are considered Level 3 in the fair value hierarchy.

During the year ended January 3, 2016 the Company recorded other lease charges of $1.6 million associated with the closure of ten of the Company's restaurants and impairment charges of $1.5 million, consisting of approximately $1.3 million of capital expenditures at previously impaired restaurants and $0.2 million related to initial impairment charges for two underperforming restaurants.

During the year ended December 28, 2014, the Company recorded other lease charges of $1.0 million associated with the closure of three of the Company's restaurants and impairment charges of $2.6 million, consisting of approximately $1.1 million of capital expenditures at previously impaired restaurants and $1.4 million related to initial impairment charges for nine underperforming restaurants.

During the year ended December 29, 2013, the Company recorded other lease charges of $1.6 million associated with the closure of four of the Company's restaurants and impairment charges of $2.8 million, consisting of $0.9 million of capital expenditures at previously impaired restaurants and $1.9 million related to initial impairment charges for nineteen underperforming restaurants.

The following table presents the activity in the accrual for closed restaurant locations:



	January 3, 2016			December 28, 2014
Balance, beginning of year	$	1,721		$	1,466
Provisions for restaurant closures	1,472			724
Changes in estimates of accrued costs	(95		)	87
Payments, net	(1,228		)	(721		)
Other adjustments, including the effect of discounting future obligations	218			165
Balance, end of year	$	2,088		$	1,721

Changes in estimates of accrued costs primarily relate to revisions to certain sublease income assumptions and costs.