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Revenue | 6 Months Ended
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Jun. 30, 2018
Revenue from Contract with Customer [Abstract] |
Revenue | Revenue Revenue Recognition Laureate's revenues primarily consist of tuition and educational service revenues. We also generate other revenues from student fees, dormitory/residency fees and other education-related activities. These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues. Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. These revenues are recognized net of scholarships and other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs. Laureate's institutions have various billing and academic cycles. We determine revenue recognition through the five-step model prescribed by Topic 606 as follows: •Identification of the contract, or contracts, with a customer; •Identification of the performance obligations in the contract; •Determination of the transaction price; •Allocation of the transaction price to the performance obligations in the contract; and •Recognition of revenue when, or as, we satisfy a performance obligation. We assess collectibility on a portfolio basis prior to recording revenue. Generally, students cannot re-enroll for the next academic session without satisfactory resolution of any past-due amounts. If a student withdraws from an institution, Laureate's obligation to issue a refund depends on the refund policy at that institution and the timing of the student's withdrawal. Generally, our refund obligations are reduced over the course of the academic term. We record refunds as a reduction of deferred revenue as applicable. The following table shows the components of Revenues by segment and as a percentage of total net revenue for the three months ended June 30, 2018:
| Brazil | Mexico | Andean & Iberian | Central America & U.S. Campuses | EMEAA | Online & Partnerships | Corporate(1) | Total
Tuition and educational services | $ | 343,171 |  | $ | 174,964 |  | $ | 509,935 |  | $ | 75,497 |  | $ | 166,011 |  | $ | 180,373 |  | $ | — |  | $ | 1,449,951 |  | 116 | %
Other | 2,842 |  | 19,951 |  | 29,417 |  | 13,040 |  | 11,890 |  | 12,551 |  | (5,605 | ) | 84,086 |  | 7 | %
Gross revenue | 346,013 |  | 194,915 |  | 539,352 |  | 88,537 |  | 177,901 |  | 192,924 |  | (5,605 | ) | 1,534,037 |  | 123 | %
Less: Discounts / waivers / scholarships | (120,414 | ) | (35,270 | ) | (52,893 | ) | (10,118 | ) | (39,456 | ) | (27,969 | ) | — |  | (286,120 | ) | (23 | )%
Total | $ | 225,599 |  | $ | 159,645 |  | $ | 486,459 |  | $ | 78,419 |  | $ | 138,445 |  | $ | 164,955 |  | $ | (5,605 | ) | $ | 1,247,917 |  | 100 | %
(1) Includes the elimination of intersegment revenues. The following table shows the components of Revenues by segment and as a percentage of total net revenue for the six months ended June 30, 2018:
| Brazil | Mexico | Andean & Iberian | Central America & U.S. Campuses | EMEAA | Online & Partnerships | Corporate(1) | Total
Tuition and educational services | $ | 545,274 |  | $ | 341,274 |  | $ | 718,704 |  | $ | 151,554 |  | $ | 337,068 |  | $ | 361,618 |  | $ | — |  | $ | 2,455,492 |  | 115 | %
Other | 5,703 |  | 45,229 |  | 53,330 |  | 26,495 |  | 24,807 |  | 26,732 |  | (9,328 | ) | 172,968 |  | 8 | %
Gross revenue | 550,977 |  | 386,503 |  | 772,034 |  | 178,049 |  | 361,875 |  | 388,350 |  | (9,328 | ) | 2,628,460 |  | 123 | %
Less: Discounts / waivers / scholarships | (202,586 | ) | (70,960 | ) | (69,345 | ) | (20,604 | ) | (76,396 | ) | (55,364 | ) | — |  | (495,255 | ) | (23 | )%
Total | $ | 348,391 |  | $ | 315,543 |  | $ | 702,689 |  | $ | 157,445 |  | $ | 285,479 |  | $ | 332,986 |  | $ | (9,328 | ) | $ | 2,133,205 |  | 100 | %
(1) Includes the elimination of intersegment revenues. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting in ASC Topic 606. A contract’s transaction price is allocated to each performance obligation identified in the arrangement based on the relative standalone selling price of each distinct good or service in the contract and recognized as revenue when, or as, the performance obligation is satisfied. The primary method used to estimate standalone selling price is the adjusted market assessment approach, under which we evaluate the market and estimate the price that a customer would be willing to pay for the goods and services we provide. Our performance obligations are primarily satisfied over time during the course of an academic semester or academic year. Laureate's transaction price is determined based on gross price, net of scholarships and other discounts, refunds, waivers and the fair value of any guarantees made by Laureate related to student financing programs. The majority of our revenue is derived from tuition and educational services agreements with students, and thus, is recognized over time on a weekly straight-line basis over each academic session. We view the knowledge gained by the student as the benefit which the student receives during the academic sessions. We use the output method to recognize tuition and educational services revenue as this method faithfully depicts our performance toward complete satisfaction of the performance obligation. Dormitory/residency revenues, which are included in the Other line item in the table above, are recognized over time throughout the occupancy period using the output method based on the proportional period of time elapsed which faithfully depicts our performance toward complete satisfaction of the performance obligation. We have elected the optional exemption to not disclose amounts where the performance obligation is part of a contract that has an original expected duration of one year or less. We expect to recognize substantially all revenue on these remaining performance obligations over the next 12 months. Contract Balances The timing of billings, cash collections and revenue recognition results in accounts receivable (contract assets) and deferred revenue and student deposits (contract liabilities) on the Consolidated Balance Sheets. We have various billing and academic cycles and recognize student receivables when an academic session begins, although students generally enroll in courses prior to the start of the academic session. Receivables are recognized only to the extent that it is probable that we will collect substantially all of the consideration to which we are entitled in exchange for the goods and services that will be transferred to the student. We receive advance payments or deposits from our students before revenue is recognized, which are recorded as contract liabilities in deferred revenue and student deposits. Payment terms vary by university with some universities requiring payment in advance of the academic session and other universities allowing students to pay in installments over the term of the academic session. All of our contract assets are considered accounts receivable and are included within the Accounts and notes receivable balance in the accompanying Consolidated Balance Sheets. Total accounts receivable from our contracts with students were $618,301 and $535,176 as of June 30, 2018 and December 31, 2017, respectively. In addition, as of June 30, 2018 and December 31, 2017, accounts receivable that were classified as assets held for sale were $4,353 and $34,744, respectively. The increase in the contract assets balance for the period ended June 30, 2018 is primarily driven by our enrollment cycle. The first calendar quarter generally coincides with the primary intake for some of our larger institutions. All contract asset amounts are classified as current. Contract liabilities in the amount of $351,951 and $312,422 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, respectively. In addition, as of June 30, 2018 and December 31, 2017, contract liabilities that were classified as liabilities held for sale were $35,379 and $94,951, respectively. The increase in the contract liability balance during the period ended June 30, 2018 is the result of semester billings and cash payments received in advance of satisfying performance obligations, offset by revenue recognized during that period. Revenue recognized for the six months ended June 30, 2018 that was included in the contract liability balance at the beginning of the year was approximately $256,000. Costs to Obtain a Contract Certain commissions and bonuses earned by third party agents and our employees are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized over the period of benefit which ranges from two to four years. We determined the expected period of benefit, by university, as the expected student enrollment period. As of June 30, 2018 and December 31, 2017, the asset balances were $7,780 and $0, respectively, and the accumulated amortization balances were $2,021 and $0, respectively, both of which are included in Deferred costs, net, in the accompanying Consolidated Balance Sheets. The associated operating cost of $2,021 was recorded in Direct costs in the accompanying Consolidated Statement of Operations for the six months ended June 30, 2018. We also pay certain commissions and bonuses where the period of benefit is one year or less. We have elected the practical expedient available in ASC 340-40 whereby any incremental costs of obtaining a contract are recognized as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less. Practical Expedients and Optional Exemptions We elected to adopt this standard using the modified retrospective approach with the cumulative effect of adoption recognized at the initial date of application. We have elected to apply the standard only to contracts that are not completed at the initial date of application. As noted above, we recognize the incremental costs of obtaining a contract with a student as an expense when incurred in instances where the amortization period of the asset that we would have recognized is one year or less. We have made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with specific revenue-producing transactions and collected by the entity from our customers (e.g., sales, use, value added, some excise taxes).

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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