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Contract Acquisition Costs and Intangible Asset

3 Months Ended

Mar. 31, 2023

Contract Acquisition Costs and Intangible Asset

Contract Acquisition Costs and Intangible Asset

4. Contract Acquisition Costs and Intangible Asset

Contract acquisition costs and intangible asset are summarized as follows:


	March 31, 2023						December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Contract acquisition costs	$	12,980	$	(4,569)	$	8,411	$	12,980	$	(4,376)	$	8,604
Intangible asset	$	5,620	$	(1,977)	$	3,643	$	5,620	$	(1,894)	$	3,726

We are amortizing the value of the contract acquisition costs and intangible asset on a pro-rata basis based on the estimated total revenue or net profits to be recognized over the period from November 18, 2020 through December 2032, the termination date of the Promotion Agreement (see Note 2-Revenue Recognition for our accounting policies). Amortization of contract acquisition costs is recorded as a reduction of revenue and amortization of the intangible asset is recorded as cost of revenue.

We recorded amortization related to the contract acquisition costs of $0.2 million and $0.4 million for the three months ended March 31, 2023 and 2022, respectively. We recorded amortization related to the intangible asset of $0.1 million and $0.2 million for the three months ended March 31, 2023 and 2022, respectively. Annual amortization over the next five years is expected to be lower than prior years primarily due to an amendment to the Promotion Agreement entered into during the fourth quarter of 2022, which extended the term of the Promotion Agreement by five years.