Deferred costs of fulfillment

Deferred costs to fulfill contracts primarily 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. The Company also defers certain technology design and data migration costs it incurs to fulfil its performance obligations contained in our MSE arrangements. For the nine months ended September 30, 2020, the Company capitalized $129.9 million and also amortized $125.8 million of contract costs. There was no impairment loss recognized in relation to the costs capitalized during the nine months ended September 30, 2020. Amortization expense of deferred costs is primarily included in cost of revenue, and to a lesser extent t

echnical operations and development expense.

The breakdown of the movement in the prepaid domain name registry and ancillary services fees balance for the nine months ended September 30, 2020 is as follows (Dollar amounts in thousands of U.S. dollars).

	*September 30, 2020*

Balance, beginning of period	$	109,167
Deferral of costs		129,879
Recognized costs		(125,806	)
Balance, end of period	$	113,240