5. DEFERRED CONTRACT COSTS

Sales incentives paid by the Company are considered incremental and recoverable costs of obtaining a contract with a client. These costs are deferred, as a long-term asset, and then amortized using the straight-line method over the period of benefit which is on average five years. The Company determined the period of benefit by taking into consideration client contracts, the Company’s technology, and other factors. The Company utilizes a practical expedient available under ASC 606 to expense costs to obtain a contract as incurred when the original amortization period is one year or less.


(in thousands)	June 30, 2018		December 31, 2017
Deferred contract costs⁽¹⁾	$	42,246	$	37,924

⁽¹⁾ Included in other long-term assets in the unaudited condensed consolidated balance sheets.

Amortization of deferred contract costs was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2018		2017		2018		2017
Amortization of deferred contract costs⁽¹⁾	$	3,809	$	2,902	$	7,598	$	5,496

⁽¹⁾ Included in selling and marketing expenses in the unaudited condensed consolidated statement of operations.

During the six months ended June 30, 2018 and 2017, impairment of deferred contract costs was not material.