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Decoding Byju’s FY21 Balance Sheet

The fall in revenue is also attributed to the auditor disallowing revenue recognition on an upfront basis.

The company, in its notes to the accounts, has changed the revenue recognition retrospectively.

Revenue from products, which were previously recognised fully on commencement of contract, has been adjusted to be recognised rateably over the period of the contract. Further, this contract could vary between 2-3 years.

According to the notes to the account, such revenue amounted to Rs 1,156.27 crore in FY21, which will now be recognised once all the revenue is received or the contract expires.

At the same time, the cost of the product attributed to this revenue of Rs 109.18 crore is expensed to the profit and loss statement.

Of this deferred revenue, Think & Learn will receive close to Rs 1,061 crore in the future from customers. The amount already received is accounted as short-term loans in the balance sheet.

Further, the interest paid to loan partners on behalf of customers, with respect to loans granted directly to customers, have been reclassified from finance cost and adjusted against revenues, since these payments are in the nature of payments to customers.

As a result, in FY20, revenue declined by Rs 191.77 crore to Rs 2,188.9 crore, its finance cost reduced by Rs 148.40 crore to Rs 13.72 crore leading to loss before tax increasing to Rs 361.57 crore.

The changes also led to unearned revenue of Rs 123.41 crore, which was pushed to the subsequent fiscal and losses increased to Rs 598.50 crore.

The fiscal also saw its revenue from India decline by 38.4% to Rs 987.67 crore, largely due to revenue recognition method, while its revenue in the U.S. subsequent to acquisitions rose 133% to Rs 795.59 crore.

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