Auditory processing disorder (APD), also known as central auditory processing disorder (CAPD), is a complex problem. These children can't process the information they hear in the same way as others because their ears and brain don't fully coordinate. Something adversely affects the way the brain recognizes and interprets sounds, most notably the sounds composing speech.
Children with APD often do not recognize subtle differences between sounds in words, even when the sounds are loud and clear enough to be heard. These kinds of problems usually occur in background noise, which is a natural listening environment. So children with APD have the basic difficulty of understanding any speech signal presented under less than optimal conditions.