7. licensed Content Assets

The Company licenses content for streaming on The Roku Channel. The licensing arrangements can be for a fixed fee or variable fee. The licensing arrangements specify the period when the content is available for streaming. The Company capitalizes the fixed content fees and its corresponding liability when the license period begins, the cost of the content is known, and the content is accepted and available for streaming. If the licensing fee is not determinable or reasonably estimable, no asset or liability is recorded, and licensing costs are expenses as incurred.  The Company amortizes licensed content assets into Cost of Revenue, Platform, using the straight-line method over the contractual period of availability. The liability is paid in accordance with the contractual terms of the arrangement. On January 1, 2020, the Company adopted the guidance in ASU 2019-02, Entertainment—Films—Other Assets—Film Costs (Subtopic 926-20) and Entertainment—Broadcasters—Intangibles—Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, on a prospective basis. The adoption did not have material impact on its financial statements.

As of December 31, 2020, licensed content assets that met these requirements were $7.9 million and are recorded in “Other non-current assets.” As of December 31, 2019, licensed content assets that met these requirements were $1.7 million and are recorded in Prepaid expenses and other current assets. Payments for content, including additions to content assets and the changes in related liabilities, are classified within Net cash provided by operating activities on the consolidated statements of cash flows. The increase in the content asset is due to a change in the mix of content licensed and the period over which such content is available for streaming. The corresponding liability is included in Accrued liabilities and Other long-term liabilities and is discussed in Note 12.

The Company recorded amortization expense of $22.4 million and $2.9 million for the years ended December 31, 2020 and 2019, respectively, in Cost of revenue, platform in the consolidated statements of operations, related to capitalized licensed content assets. The following table reflects the amortization expense for the next three years for capitalized licensed content assets as of December 31, 2020 (in thousands):

Licensed content assets are primarily monetized together as a unit, referred to as a film group. The film group is evaluated for impairment whenever an event occurs or circumstances change indicating the fair value is less than the carrying value. The Company reviews various qualitative factors and indicators to assess whether the group asset is impaired. As of December 31, 2020, the Company did not recognize any impairment for capitalized licensed content assets.