Note 12 - Costs to Obtain and Fulfill a Contract

6 Months Ended

Jun. 30, 2020

12. Costs to obtain and fulfill a Contract

Deferred costs of fulfillment

Deferred costs to fulfill contracts generally consist of domain registration costs which have been paid to a domain registry, and are capitalized as Prepaid domain name registry and ancillary services fees. These costs are deferred and amortized over the life of the domain which generally ranges from one to ten years. For the six months ended June 30, 2020, the Company capitalized $88.2 million and also amortized $83.1 million of contract costs. There was no impairment loss recognized in relation to the costs capitalized during the six months ended June 30, 2020. Amortization expense of deferred costs is primarily included in cost of revenue. The breakdown of the movement in the prepaid domain name registry and ancillary services fees balance for the six months ended June 30, 2020 is as follows (Dollar amounts in thousands of U.S. dollars).

	*June 30, 2020*

Balance, beginning of period	$	109,167
Deferral of costs		88,194
Recognized costs		(83,137	)
Balance, end of period	$	114,224