Sales of Receivables

9 Months Ended

Mar. 31, 2020

Transfers And Servicing Of Financial Assets [Abstract]

Sales of Receivables

10. Sales of Receivables

On December 27, 2019, the Company amended its Master Accounts Receivable Purchase Agreement (MARPA) with MUFG Bank, Ltd. (the Purchaser), for the sale of certain designated eligible U.S. government receivables.  The amendment extended the term of the MARPA to December 24, 2020.  Under the MARPA, the Company can sell eligible receivables, including certain billed and unbilled receivables up to a maximum amount of $200.0 million.  The Company’s receivables are sold under the MARPA without recourse for any U.S. government credit risk.

The Company accounts for receivable transfers under the MARPA as sales under ASC 860, Transfers and Servicing, and derecognizes the sold receivables from its balance sheets.  The fair value of the sold receivables approximated their book value due to their short-term nature.  

The Company does not retain an ongoing financial interest in the transferred receivables other than cash collection and administrative services.  The Company estimated that its servicing fee was at fair value and therefore no servicing asset or liability related to these receivables was recognized as of March 31, 2020.  Proceeds from the sold receivables are reflected in our operating cash flows on the statement of cash flows.

MARPA activity consisted of the following (in thousands):

	As of and for the
	Nine Months Ended
	March 31, 2020
Outstanding balance – June 30, 2019:	$	192,527
Sales of receivables		1,750,496
Cash collections		(1,749,524	)
Outstanding balance sold to Purchaser – March 31, 2020: (1)		193,499
Cash collected, not remitted to Purchaser (2)		(55,588	)
Remaining sold receivables	$	137,911

(1) For the nine months ended March 31, 2020, the Company recorded a cash inflow in its cash flows from operating activities of $1.0 million from sold receivables.  The cash inflow is calculated as the change in the outstanding balance of sold receivables as of March 31, 2020, compared with the outstanding balance as of June 30, 2019.

(2) Includes the cash collected on behalf of but not yet remitted to the Purchaser as of March 31, 2020.  This balance represents an obligation to the Purchaser and is included in other accrued expenses and current liabilities in the accompanying consolidated balance sheet.