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 December 31, 2017 the Company recorded impairment and other lease charges of $2.8 million including $0.7 million of capital expenditures at previously impaired restaurants, $1.1 million related to initial impairment charges for five underperforming restaurants, $0.9 million of other lease charges primarily due to four restaurants and an acquired administrative office closed during the period and non-cash losses of $0.1 million associated with the sale-leaseback of one restaurant property.

During the year ended January 1, 2017, the Company recorded impairment and other lease charges of $2.4 million including $0.9 million for capital expenditures at previously impaired restaurants, $0.2 million related to initial impairment charges for four underperforming restaurants and non-cash losses of $1.2 million associated with the sale-leaseback of seven restaurant properties.

During the year ended January 3, 2016, the Company recorded impairment and other lease charges of $3.1 million including other lease charges of $1.6 million associated with the closure of ten of the Company's restaurants, impairment charges of $1.3 million for capital expenditures at previously impaired restaurants and $0.2 million related to initial impairment charges for two underperforming restaurants.

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



	December 31, 2017			January 1, 2017
Balance, beginning of year	$	1,513		$	2,088
Provisions for closures	1,174			59
Changes in estimates of accrued costs	81			(89		)
Payments, net	(862		)	(691		)
Other adjustments, including the effect of discounting future obligations	122			146
Balance, end of year	$	2,028		$	1,513

Changes in estimates of accrued costs primarily relate to revisions of terminations of certain closed restaurant leases, changes in assumptions for sublease income assumptions and other costs.