This excerpt taken from the TPTX 10-Q filed Nov 12, 2008.
(5) Impairment of Long-Lived Assets and Assets Held for Sale
In September 2008 we initiated a strategic restructuring in connection with the September 30, 2008 conclusion of our Alzheimers disease genetics cooperation agreement with Eisai Co., Ltd. (Eisai). As part of the restructuring, we will transition from a discovery and development company to a development-only company. During the fourth quarter of 2008 we plan to sell the equipment that supported our discovery efforts.
During the third quarter of 2008, we performed a recoverability test of the long-lived assets related to our discovery efforts in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The recoverability test was based on the estimated undiscounted future cash flows expected to result from the disposition of the assets that supported our discovery efforts. Based on the recoverability analysis performed, we do not believe that the estimated undiscounted future cash flows expected to result from the disposition of the discovery assets will be sufficient to recover the carrying value of these assets. Accordingly, we recorded a non-cash charge for the impairment of long-lived assets of $158,000 in the third quarter of 2008 to write-down the carrying value of these assets to their estimated fair value. The impairment loss has been recorded as a separate line item, Loss on impairment of property and equipment, in the statement of operations for the three and nine months ended September 30, 2008. The fair value was estimated based upon sales prices of similar assets. The carrying value of the property and equipment that is held for sale is separately presented in the Assets held for sale caption in the balance sheet.