Revenue

9 Months Ended

Sep. 30, 2020

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 ASC Topic 606, Revenue from Contracts with Customers, 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 reportable segment plus the Corporate business unit, and as a percentage of total revenue for the three months ended September 30, 2020 and 2019:

	Mexico		Peru		Corporate(1)		Total
2020
Tuition and educational services	$	141,897	$	126,455	$	—	$	268,352	110	%
Other	17,491		11,718		260		29,469		12	%
Gross revenue	159,388		138,173		260		297,821		122	%
Less: Discounts / waivers / scholarships	(43,439)		(10,859)		—		(54,298)		(22)	%
Total	$	115,949	$	127,314	$	260	$	243,523	100	%
2019
Tuition and educational services	$	156,123	$	125,006	$	—	$	281,129	102	%
Other	27,540		14,392		672		42,604		15	%
Gross revenue	183,663		139,398		672		323,733		117	%
Less: Discounts / waivers / scholarships	(37,873)		(8,593)				(46,466)		(17)	%
Total	$	145,790	$	130,805	$	672	$	277,267	100	%

The following table shows the components of Revenues by reportable segment and as a percentage of total net revenue for the nine months ended September 30, 2020 and 2019:

	Mexico		Peru		Corporate(1)		Total
2020
Tuition and educational services	$	442,470	$	352,949	$	—	$	795,419	108	%
Other	56,845		29,456		3,264		89,565		12	%
Gross revenue	499,315		382,405		3,264		884,984		120	%
Less: Discounts / waivers / scholarships	(114,294)		(30,992)		—		(145,286)		(20)	%
Total	$	385,021	$	351,413	$	3,264	$	739,698	100	%
2019
Tuition and educational services	$	499,013	$	377,235	$	—	$	876,248	102	%
Other	75,202		38,791		4,460		118,453		14	%
Gross revenue	574,215		416,026		4,460		994,701		116	%
Less: Discounts / waivers / scholarships	(109,506)		(24,971)		—		(134,477)		(16)	%
Total	$	464,709	$	391,055	$	4,460	$	860,224	100	%

(1) Includes the elimination of intersegment revenues.

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 $136,240 and $123,132 as of September 30, 2020 and December 31, 2019, respectively. The increase in the contract assets balance at September 30, 2020 compared to December 31, 2019 was primarily driven by our enrollment cycles. The first and third calendar quarters generally coincide with the primary and secondary intakes for our larger institutions. All contract asset amounts are classified as current.

Contract liabilities in the amount of $62,612 and $54,849 were included within the Deferred revenue and student deposits balance in the current liabilities section of the accompanying Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, respectively. The increase in the contract liability balance during the period ended September 30, 2020 was 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 nine months ended September 30, 2020 that was included in the contract liability balance at the beginning of the year was approximately $43,600.