Contract Assets and Contract Liabilities

Costs incurred for mobilization, upfront modifications/upgrades and contract preparation are direct costs incurred to fulfill contracts and are expensed over the expected recognition period or in the case of capital upgrades or capital modifications such costs are capitalized and depreciated in accordance with the Company's fixed asset capitalization policy. Such costs other than those capitalized as fixed assets are deferred and recorded as contract assets or contract liabilities.

The following table sets forth contract assets and contract liabilities (mobilization and upgrade/modification revenue) on the Condensed Consolidated Balance Sheets (in millions):



	Balance Sheet Classification	June 30, 2018		December 31, 2017
Contract assets
Current	Prepaid expenses and other current assets	$	2.4	$	2.8
Noncurrent	Other assets	0.1		—
		$	2.5	$	2.8

Contract liabilities
Current	Deferred revenue	$	6.8	$	1.1
Noncurrent	Other liabilities	0.2		0.5
		$	7.0	$	1.6

Presented in the table below are the changes in contract assets during the six months ended June 30, 2018 (in millions):



	June 30, 2018
Deferred mobilization and contract preparation costs
Beginning balance	$	2.8
Plus: contractual additions	3.7
Less: amortization	4.0
Ending deferred mobilization and upgrade/modification costs	$	2.5

Presented in the table below are the changes in contract liabilities (mobilization and upgrade/modification revenue) during the six months ended June 30, 2018 (in millions):



	June 30, 2018
Deferred mobilization and upgrade/modification revenue
Beginning balance	$	1.6
Plus: contractual additions	10.0
Less: amortization	4.6
Ending deferred mobilization and upgrade/modification revenue	$	7.0

Estimated future amortization at June 30, 2018 of our contract assets and contract liabilities to be recognized over the expected recognition period is set for in the following table (in millions):



	Remaining
	2018	2019	Total
Amortization of contract liabilities	5.7	1.3	7.0
Amortization of contract assets	2.4	0.1	2.5

No impairment losses were recognized on contract assets during the three and six months ended June 30, 2018.