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Contract Acquisition Costs and Intangible Asset

9 Months Ended

Sep. 30, 2024

Contract Acquisition Costs and Intangible Asset

Contract Acquisition Costs and Intangible Asset

5. Contract Acquisition Costs and Intangible Asset

Contract acquisition costs and intangible asset are summarized as follows:


	September 30, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Contract acquisition costs	$	12,980	$	(5,547)	$	7,433	$	12,980	$	(5,058)	$	7,922
Intangible asset	$	5,620	$	(2,401)	$	3,219	$	5,620	$	(2,190)	$	3,430

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 $0.1 million for the three months ended September 30, 2024 and 2023, respectively, and of $0.5 million and $0.5 million for the nine months ended September 30, 2024 and 2023, respectively. We recorded amortization related to the intangible asset of $0.1 million and $0.1 million for the three months ended September 30, 2024 and 2023, respectively, and of $0.2 million and $0.2 million for the nine months ended September 30, 2024 and 2023, respectively. Annual amortization over the next five years is expected to immaterially fluctuate from the 2024 amounts, consistent with changes to net profits to be recognized pursuant to the Promotion Agreement over the period.