Revenue

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Disaggregation of Revenue

        In the following table, revenue, shown net of grants and scholarships, is disaggregated by type of service provided. The table also includes a reconciliation of the disaggregated revenue with the reportable segments (in thousands):

	Three Months Ended June 30, 2020
	(Unaudited)
	APEI		HCN		Intersegment		Consolidated
Instructional services, net of grants and scholarships	$	73,082	$	7,268	$	(22)	$	80,328
Graduation fees	275		—		—		275
Textbook and other course materials	—		1,194		—		1,194
Other fees	190		140		—		330
Total Revenue	$	73,547	$	8,602	$	(22)	$	82,127

	Three Months Ended June 30, 2019
	(Unaudited)
	APEI		HCN		Intersegment		Consolidated
Instructional services, net of grants and scholarships	$	62,973	$	6,238	$	(29)	$	69,182
Graduation fees	274		—		—		274
Textbook and other course materials	—		799		—		799
Other fees	201		104		—		305
Total Revenue	$	63,448	$	7,141	$	(29)	$	70,560

	Six Months Ended June 30, 2020
	(Unaudited)
	APEI		HCN		Intersegment		Consolidated
Instructional services, net of grants and scholarships	$	139,638	$	13,659	$	(39)	$	153,258
Graduation fees	601		—		—		601
Textbook and other course materials	—		2,223		—		2,223
Other fees	402		259		—		661
Total Revenue	$	140,641	$	16,141	$	(39)	$	156,743

	Six Months Ended June 30, 2019
	(Unaudited)
	APEI		HCN		Intersegment		Consolidated
Instructional services, net of grants and scholarships	$	128,171	$	13,013	$	(56)	$	141,128
Graduation fees	584		—		—		584
Textbook and other course materials	—		1,661		—		1,661
Other fees	414		214		—		628
Total Revenue	$	129,169	$	14,888	$	(56)	$	144,001

The APEI Segment charges the HCN Segment for the value of courses taken by HCN Segment employees at APUS. The intersegment elimination represents the elimination of this intersegment revenue in consolidation.

Contract Balances and Performance Obligations

The Company has no contract assets or deferred contract costs as of June 30, 2020 and December 31, 2019.

The Company recognizes a contract liability, or deferred revenue, when a student begins an online course or term, in the case of APUS, or starts a term, in the case of HCN. Deferred revenue at June 30, 2020 was $20.8 million and includes $12.0 million in future revenue that has not yet been earned for courses and terms that are in progress, as well as $8.8 million in consideration received in advance for future courses or terms, or student deposits. Deferred revenue at December 31, 2019 was $17.4 million and includes $9.6 million in future revenue that has not yet been earned for courses and terms that are in progress, as well as $7.8 million in student deposits. Deferred revenue represents the Company’s performance obligation to transfer future instructional services to students. The Company’s remaining performance obligations represent the transaction price allocated to future reporting periods.

The Company has elected, as a practical expedient, not to disclose additional information about unsatisfied performance obligations for contracts with customers that have an expected duration of one year or less.

When the Company begins performing its obligations, a contract receivable is created, resulting in accounts receivable on the Company’s Consolidated Balance Sheets. The Company accounts for receivables in accordance with FASB ASC 310, Receivables. The Company uses the portfolio approach, a practical expedient, to evaluate if a contract exists and to assess collectability at the time of contract inception based on historical experience. Contracts are subsequently reviewed for collectability if significant events or circumstances indicate a change.

The allowance for doubtful accounts is based on management’s evaluation of the status of existing accounts receivable. Among other factors, management considers the age of the receivable, the anticipated source of payment, and historical allowance considerations. Consideration is also given to any specific known risk areas among the existing accounts receivable balances. Recoveries of receivables previously written off are recorded when received. APUS does not charge interest on past due accounts receivable. HCN charges interest on payment plans when a student leaves upon graduation or exit of the program. Interest income earned on open receivables during the three and six months ended June 30, 2020 was approximately $4,300 and $8,600, compared to interest income of approximately $3,000 and $8,000 earned during the three and six months ended June 30, 2019.

For the three and six months ended June 30, 2020, there were no material impacts to revenue, deferred revenue, or accounts receivable due to the COVID-19 pandemic.