“The company says that’s because of a change in the revenue recognition policy where they weren’t allowed to record all of the upfront payments received in a single year.”
Isn’t this simply the difference between cash and accrual accounting?
As per Indian Accounting Standards, you're required to recognize revenue as your performance obligation is completed. So, the upfront payment that BYJU's received for its subscription services was deferred to future years to be recognized over the period of the contract. The policy that BYJU's had initially set was incorrect.
“The company says that’s because of a change in the revenue recognition policy where they weren’t allowed to record all of the upfront payments received in a single year.”
Isn’t this simply the difference between cash and accrual accounting?
That's correct.
As per Indian Accounting Standards, you're required to recognize revenue as your performance obligation is completed. So, the upfront payment that BYJU's received for its subscription services was deferred to future years to be recognized over the period of the contract. The policy that BYJU's had initially set was incorrect.
Indian law doesn’t allow for cash accounting?
Nope, you have to follow the accrual basis of accounting
Interesting!
Didn’t know that