Revenue from Contracts with Customers

Adoption of ASC 606

We adopted ASC 606 effective October 1, 2017. As a result, we have changed our accounting for revenue recognition as detailed in Note 2. Except for the changes resulting from this adoption, we have consistently applied the accounting policies to all periods presented in these consolidated financial statements.

We applied ASC 606 using the modified retrospective method by recognizing the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of equity at October 1, 2017. Therefore, the comparative information has not been adjusted and continues to be reported under the prior guidance of ASC 605. The details of the significant changes and quantitative impact of the changes are disclosed in Note 3.

Nature of Goods and Services

See Note 2 for a description of the nature of revenues.

We provide postsecondary education and other services in the same geographical market, the U.S. The impact of economic factors on the nature, amount, timing and uncertainty of revenue and cash flows is consistent among our various postsecondary education programs. See Note 17 for disaggregated segment revenue information.

Contract Balances

Contract assets primarily relate to the Company’s rights to consideration for work completed in relation to its services performed but not billed at the reporting date. The contract assets are transferred to the receivables when the rights become unconditional. Currently, the Company does not have any contract assets which have not transferred to a receivable. The contract liabilities primarily relate to service contracts where we received payments but we have not yet satisfied the related performance obligations. The advance consideration received from customers for the services is a contract liability until services are provided to the customer.

The following table provides information about receivables and contract liabilities from contracts with customers:



	September 30, 2018		September 30, 2017
Receivables, which includes Tuition and Notes Receivable	$	46,372	$	10,268
Contract liabilities	$	38,236	$	41,338

During the year ended September 30, 2018, the contract liabilities balance included decreases for revenues recognized during the period and increases related to new students who started school during the period.

Transaction Price Allocated to the Remaining Performance Obligations

Tuition and fee revenue is recognized ratably over the term of the course or program offered. The majority of our programs are designed to be completed in 33 to 102 weeks, and our advanced training programs range from 12 to 23 weeks in duration.

Impacts on Financial Statements

In accordance with Topic 606, the disclosure of the impact of adoption to our consolidated statements of loss and balance sheets was as follows:



	September 30, 2018
	As Reported			Adjustments			Balance Without ASC 606 Adoption
Consolidated Balance Sheet Data:
Notes receivable, current portion	$	5,183		$	(5,183	)	$	—
Total current assets	116,795			(5,183		)	111,612
Notes receivable, less current portion	31,194			(31,194		)	—
Total assets	282,278			(36,377		)	245,901

Deferred revenue	$	38,236		$	(1,408	)	$	36,828
Total current liabilities	92,462			(1,408		)	91,054
Total liabilities	155,633			(1,408		)	154,225
Retained deficit	(31,555		)	(34,969		)	(66,524		)
Total shareholders' equity	126,645			(34,969		)	91,676
Total liabilities and shareholders' equity	282,278			(36,377		)	245,901



	Year Ended September 30, 2018
	As Reported		Adjustments	Balance Without ASC 606 Adoption
Consolidated Statement of Loss Data:
Revenues	316,965		2,241	319,206
Loss from operations	(35,275	)	2,241	(33,034	)
Loss before income taxes	(35,697	)	2,241	(33,456	)
Net loss	(32,682	)	2,241	(30,441	)