Capitalized contract costs

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Capitalized contract costs

Note 12 — Capitalized contract costs

The company’s incremental direct costs of obtaining a contract consist of sales commissions which are deferred and amortized ratably over the initial contract life. These costs are classified as current or noncurrent based on the timing of when the company expects to recognize the expense. The current and noncurrent portions of deferred commissions are included in prepaid expenses and other current assets and in other long-term assets, respectively, in the company’s consolidated balance sheets.

Deferred commissions were as follows:

As of December 31,	2021		2020
Deferred commissions	$	6.7	$	8.7

Amortization expense related to deferred commissions was as follows:

Year ended December 31,	2021		2020		2019
Deferred commissions—amortization expense(i)	$	2.9	$	3.2	$	3.1

(i)  Reported in selling, general and administrative expense in the company’s consolidated statements of income (loss)

Costs on outsourcing contracts are generally expensed as incurred. However, certain costs incurred upon initiation of an outsourcing contract (costs to fulfill a contract), principally initial customer setup, are capitalized and expensed over the initial contract life. These costs are included in outsourcing assets, net in the company’s consolidated balance sheets, and are amortized over the initial contract life and reported in cost of revenue.

Costs to fulfill a contract were as follows:

As of December 31,	2021		2020
Costs to fulfill a contract	$	56.2	$	74.4

Amortization expense related to costs to fulfill a contract was as follows:

Year ended December 31,	2021		2020		2019
Costs to fulfill a contract—amortization expense	$	27.9	$	27.5	$	24.2

The remaining balance of outsourcing assets, net is comprised of fixed assets and software used in connection with outsourcing contracts. These costs are capitalized and depreciated over the shorter of the initial contract life or in accordance with the company’s fixed asset policy.