Client context

Client A is a Ukrainian B2B SaaS provider serving the fintech industry. At the start of the engagement the company had around 180 employees, of whom approximately 130 were engineers in Kyiv and Lviv. 92% of revenue was denominated in US dollars from customers in the UK, EU and Singapore. Legally the group consisted of a Ukrainian operating company and a Delaware holding entity.

The owners were preparing to raise a Series B round of around USD 25 million from a London-based venture fund. As a condition of due diligence, the investor expected full IFRS financial statements for the two prior years, audited by a major independent firm.

Initial state

At the time of engagement the client kept its books under local GAAP in M.E.Doc. Management reporting lived in Excel and was not reconciled to the statutory accounts. The accounting policy existed only formally and had not been updated since 2019.

Customer contracts contained multiple components (subscription, integration, training, premium support), yet revenue was recognised on a simplified basis — on the invoice date. The ESOP had been running since 2022 but was not reflected in the financial statements at all. The Kyiv office was leased for five years and treated as an operating lease.

Key challenges

The FTH team identified five main areas for adjustments:

  • revenue under IFRS 15 with separate performance obligations,
  • the option programme under IFRS 2,
  • the Kyiv office lease under IFRS 16,
  • foreign currency under IAS 21 (with USD as the functional currency),
  • capitalisation of platform development costs under IAS 38.

Transformation approach

The project ran for six weeks and was structured into four phases. In the first ten days the team carried out a diagnostic and documented the gap analysis. The next two weeks were spent building the new accounting policy and the working models for adjustments. The third phase covered the journals themselves and the preparation of two-year financial statements. The final phase was alignment with the auditor and responses to queries.

Every material adjustment was recorded in a memo with rationale, a reference to the standard and a working-paper number. This later reduced audit time by roughly a third.

Main adjustments

The largest adjustment turned out to be revenue: the simplified approach overstated current period revenue by recognising integration services in full at invoicing. After reallocating across performance obligations, the revenue adjustment came in at 4.2% of annual turnover — material but not catastrophic.

IFRS 2 ESOP added approximately USD 1.1 million of staff costs per year. Platform capitalisation under IAS 38 created an intangible asset of around USD 2.8 million and reduced current R&D expense. IFRS 16 brought a liability and right-of-use asset of about USD 1.4 million on balance sheet. Foreign exchange differences became materially smaller once the functional currency was assessed as USD.

Outcome and investor reaction

The auditor — a major international firm — completed fieldwork in four weeks with an unmodified opinion. All working papers, memos and adjustment schedules were delivered to the client as a single structured package. The investor closed due diligence in three weeks instead of the planned six.

In feedback, the fund's finance partner highlighted three things: the clarity of the accounting policy, the transparency of adjustments and the client team's ability to explain every number.

What made the project successful

Three factors. First, early engagement from the client's CFO and a willingness to discuss accounting judgements rather than delegate them entirely. Second, working with the auditor in parallel from day one, not after the transformation was finished. Third, disciplined documentation: no adjustment was left without a memo.

For a business raising institutional rounds, financial statements are not a formality — they are a trust instrument. Investors read the accounting policy more carefully than the pitch deck.