(19)	ASSET IMPAIRMENTS

Management estimates the fair value of each vessel not expected to return to active service (considered Level 3, as defined by ASC 820, Fair Value Measurements and Disclosures) by considering items such as the vessel’s age, length of time stacked, likelihood of a return to active service, actual recent sales of similar vessels, among others. For vessels with more significant carrying values, we obtain an estimate of the fair value of the stacked vessel from third-party appraisers or brokers for use in our determination of fair value estimates.

Due in part to the modernization of the company’s fleet more vessels that are being stacked are newer vessels that are expected to return to active service. Stacked vessels expected to return to active service are generally newer vessels, have similar capabilities and likelihood of future active service as other currently operating vessels, are generally current with classification societies in regards to their regulatory certification status, and are being actively marketed. Stacked vessels expected to return to service are evaluated for impairment as part of their assigned active asset group and not individually.

The company reviews the vessels in its active fleet for impairment whenever events occur or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. In such evaluation, the estimated future undiscounted cash flows generated by an asset group are compared with the carrying amount of the asset group to determine if a write-down may be required. If an asset group fails the undiscounted cash flow test, the company estimates the fair value of each asset group and compares such estimated fair value, considered Level 3, as defined by ASC 820, Fair Value Measurements and Disclosures, to the carrying value of each asset group in order to determine if impairment exists. Similar to stacked vessels, management obtains estimates of the fair values of the active vessels from third party appraisers or brokers for use in determining fair value estimates.

During fiscal 2017, the company recognized $265.2 million of impairment charges on 75 vessels that were stacked. The fair value of vessels in the stacked fleet incurring impairment during fiscal 2017 was $545.9 million (after having recorded impairment charges). Excluding leased vessels, a total of 27 vessels in the stacked fleet, representing $246 million of net book value at March 31, 2017, were not impaired during fiscal 2017.

During fiscal 2017 the company recognized $178.5 million of impairments on 57 vessels in the active fleet. The fair value of vessels in the active fleet incurring impairment during fiscal 2017 was $362.1 million (after having recorded impairment charges). Excluding leased vessels, a total of 86 vessels in the active fleet, representing $1.6 billion of net book value at March 31, 2017, were not impaired during fiscal 2017.

The total carrying value of 244 vessels (excluding leased vessels) in the stacked and active fleets at March 31, 2017 of $2.8 billion does not necessarily reflect the realizable value of such vessels if such vessels were disposed of on any expedited basis.

The table below summarizes the number of vessels and ROVs impaired, the amount of impairment incurred and the combined fair value of the assets after having recorded the impairment charges during the fiscal years ended March 31, 2017, 2016 and 2015 along with the amount of impairment.

(In thousands)	2017		2016		2015
Number of vessels impaired during the period		132		58		12
Number of ROVs impaired during the period		8		—		—
Amount of impairment incurred	$	484,727		117,311		14,525
Combined fair value of assets incurring impairment after having recorded impairment charges		933,068		422,655		28,509

Please refer to Note (1) for a discussion of the company’s accounting policy for accounting for the impairment of long-lived assets.