Key Energy Services, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Represents fair value adjustment related to assets held for sale.
Reduction in other current liabilities relates to the elimination of the current portion of deferred rent liabilities.
Reduction in other long term liabilities relates to the elimination of the non-current portion of deferred rent liabilities totaling $3,429 and reduction in asset retirement obligation to reflect estimated fair value totaling $2,855.
Reflects the cumulative impact of the fresh start accounting adjustments discussed above and the elimination of the Predecessor Company's accumulated other comprehensive loss:
Property and equipment fair value adjustment
Assets held for sale fair value adjustment
Elimination of deferred rent liability
ARO fair value adjustment
Inventory fair value adjustment
Intangible assets fair value adjustment
Elimination of Predecessor accumulated other comprehensive loss
Elimination of Predecessor additional paid in capital
Elimination of Predecessor retained deficit
NOTE 4. LIABILITIES SUBJECT TO COMPROMISE
Pursuant to ASC 852 liabilities subject to compromise in chapter 11 cases are distinguished from liabilities of non-filing entities, liabilities not expected to be compromised and from post-petition liabilities. The amount of liabilities subject to compromise represent the Company’s estimate, where an estimate is determinable, of known or potential prepetition claims to be addressed in connection with the bankruptcy proceedings. Such liabilities are reported at the Company’s current estimate, of the allowed claim amounts even though the claims may be settled for lesser amounts.
Prior to settlements pursuant to the Plan, liabilities subject to compromise was comprised of the following (in thousands):
2021 Notes Interest
Predecessor Term Loan Facility
Lease and claim rejections
NOTE 5. REORGANIZATION ITEMS
ASC 852 requires that the financial statements for periods subsequent to the filing of the Chapter 11 cases distinguish transactions and events that are directly associated with the reorganization of the ongoing operations of the business. Revenues, expenses, realized gains and losses, adjustments to the expected amount of allowed claims for liabilities subject to compromise and provisions for losses that can be directly associated with the reorganization and restructuring of the business have been reported as “Reorganization items, net” in the Consolidated Statements of Operations.