Note 11 - Costs to Obtain and Fulfill a Contract

6 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Capitalized Contract Costs [Text Block]

11. Costs to obtain and fulfill a Contract

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 deferred costs of fulfillment. 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 six months ended June 30, 2021, the Company deferred $92.3 million and amortized $88.7 million of contract costs. There was no impairment loss recognized in relation to the costs capitalized during the six months ended June 30, 2021. 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, 2021 is as follows (Dollar amounts in thousands of U.S. dollars). 

	June 30, 2021
Balance, beginning of period	$	111,066
Deferral of costs		92,308
Recognized costs		(88,736	)
Balance, end of period	$	114,638