How Fintech Companies Can Navigate Accounting And Reporting Challenges

1 Revenue recognition

Fintech companies, which initially focused on providing payment services, have evolved, and diversified their revenue streams beyond just payments. They provide a multitude of services which can include sourcing of customers for other regulated entities, providing loan management and collection services, facilitating payments through their applications, etc. It is essential for fintech companies to carefully analyze each arrangement and apply the principles of Ind AS 109 'Financial instruments' and Ind AS 115 'Revenue from contract with customers' to ensure proper revenue recognition and financial reporting compliance.

Identifying the customer in complex arrangements: In complex arrangements involving multiple counterparties such as regulated entities (Banks or Non-Banking Financial Companies (NBFCs)), merchants, co-lending partners and end-consumers/borrowers, it is essential for fintech companies to clearly identify their customer within