Accounting practices at start-ups in India come under the scanner

Where valuation has overpowered value and revenue recognition is a grey area, new accounting metrics is seeing new-age ventures jump through hoops

Ruchika Chitravanshi New Delhi

New accounting metrics are also getting introduced by some of these companies

Valuation obsession, investor pressure, and unethical practices by founders may be blamed for some of the recent misadventures of certain start-ups. They have, however, also taken the lid off the complex accounting practices and challenges these new-age ventures are just getting to grips with.
With so much money sloshing around the system, funding rounds got bigger and bigger. Critics say that left start-ups with money to burn and no need to show how they would ever turn in a profit.
“In the new-age economy, new business models are coming up. There is a lot of complexity around many areas, requiring significant judgement calls. People often go wrong with the right interpretation of accounting,” said a senior partner at one of the Big Four advisory firms.

Also Read

Sequoia emphasises 'zero tolerance' for irregularities after GoMechanic row

Auditors of GoMechanic had raised several red flags in accounting: Report

SoftBank, others in talks to lead $75-million funding in GoMechanic

GoMechanic to lay off 70% workforce, says made grave errors in judgement

Deloitte sought two key changes to Byju's FY21 financials: Report

Start-ups beyond the founders: 2023 seems to be the year of changing roles

PhonePe investors had to pay Rs 8,000 cr taxes to shift base to India: CEO

BharOS opens doors for OEMs, companies; already in talks with 8 entities

Climate tech start-up Ecozen raises $25 mn to expand beyond agriculture

Healtech startup Innovaccer lays off 15% employees amid structural rejig

First Published: Jan 26 2023 | 7:55 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on are available only to BS Premium subscribers. Already a BS Premium subscriber?LOGIN NOW

Register to