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Impairments
3 Months Ended
Jun. 30, 2011
IMPAIRMENTS

14. IMPAIRMENTS

Asset impairment expense was $33 million for the three and six months ended June 30, 2011 and $1 million for the three and six months ended June 30, 2010.

During the three months ended June 30, 2011, the Company recognized asset impairment expense of $33 million for the long-lived assets of Kelanitissa, our diesel-fired generation plant in Sri Lanka. We have continued to evaluate the recoverability of our long-lived assets at Kelanitissa as a result of both the existing government regulation which may require the government to acquire an ownership interest and the current expectation of future losses. Our evaluation during the quarter indicated that the long-lived assets were no longer recoverable and accordingly they were written down to their estimated fair value of $33 million at June 30, 2011 based on a discounted cash flow analysis. The long-lived assets had a carrying amount of $66 million prior to the recognition of asset impairment expense. Given the timing of payments under Kelanitissa's PPA with the off taker, it is possible further impairment charges may be required in the future.