Deferred Revenue-entry of right-to-use contracts and Deferred Commission Expense

Up-front payments received upon the entry of right-to-use contracts are recognized in accordance with FASB ASC 605. We recognize the up-front non-refundable payments over the estimated customer life, which, based on historical attrition rates, we have estimated to be 31 years. The commissions paid on the entry of right-to-use contracts are deferred and amortized over the same period as the related revenue.

Note 9 – Deferred Revenue-entry of right-to-use contracts and Deferred Commission Expense (continued)

Components of the change in deferred revenue-right-to-use contracts and deferred commission expense are as follows (amounts in thousands):



	Nine Months Ended September 30,
	2014			2013
Deferred revenue – right-to-use contracts, as of January 1,	$	68,673		$	62,979
Deferral of new right-to-use contracts	9,956			9,899
Deferred revenue recognized	(5,653		)	(5,453		)
Net increase in deferred revenue	4,303			4,446
Deferred revenue – right-to-use contracts, as of September 30,	$	72,976		$	67,425

Deferred commission expense, as of January 1,	$	25,251		$	22,841
Costs deferred	4,734			3,757
Commission expense recognized	(2,100		)	(1,933		)
Net increase in deferred commission expense	2,634			1,824
Deferred commission expense, as of September 30,	$	27,885		$	24,665