Summary of significant accounting policies (Policies) |
12 Months Ended | |||||||||||||||
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Mar. 31, 2026 | ||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||
| Basis of presentation and consolidation | a) Basis of presentation and consolidation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect our accounts and operations and those of our subsidiaries in which we have a controlling financial interest. The accompanying consolidated financial statements reflect all adjustments that management considers necessary for a fair presentation of the results of operations for the periods presented.
All intercompany balances and transactions have been eliminated upon consolidation. When the Company does not have a controlling interest in an investee but exerts significant influence over the investee, the Company applies the equity method of accounting.
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| Liquidity and going concern | b) Liquidity and going concern
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.
The Company has experienced operating losses in current and preceding periods. As of March 31, 2026 and 2025, the Company also has negative operating cash flows and negative working capital position. These events, among others, raise substantial doubt over the Company’s ability to continue as a going concern for a reasonable period of time. The Company expects to have ongoing requirements for capital investment to implement its business plans to achieve revenue growth forecast, control operating costs, and meet cash flow requirements. The Company’s ability to continue as a going concern is dependent upon, among other things, the Company’s mitigation plan to (i) raise additional funds from existing or new credit facilities, (ii) receive funds by raising additional share capital and/or (iii) re-structure existing liabilities.
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
The Company has undertaken multiple initiatives to achieve these goals, including agreeing to convert certain liabilities into equity and working to restructure and convert other current liabilities into equity or long-term notes, including the recently executed amendment to extend its senior secured facility into long-term debt. The Company has also filed a shelf registration statement on Form S-3 with the SEC, under which it sold equity, raising gross proceeds of $7,999,979 in May 2026, and is pursuing additional potential financing opportunities. The Company’s plans may change as a result of many factors currently unknown.
Based on the progress made to date – demonstrated by completed transactions, advanced negotiations, and investor commitments – management believes it has formulated and is executing a viable plan to obtain sufficient liquidity to meet obligations as they fall due over the next 12 months. As a result, management expects to alleviate the substantial doubt regarding the Company’s ability to continue as a going concern.
The consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary if the Company is unable to continue as a going concern.
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| Use of estimates | c) Use of estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which affect the reported amounts in the consolidated financial statements and accompanying notes. Estimates are based on historical experience, where applicable, and other assumptions which management believes are reasonable under the circumstances. On an ongoing basis, the Company evaluates its estimates and underlying assumptions, including those related to the allowance for accounts receivables, fair values of financial instruments, measurement of defined benefit obligations, impairment of non-financial assets, useful lives of property, plant and equipment and intangible assets, income taxes, certain deferred tax assets and tax liabilities, and other contingent liabilities. Although these estimates are inherently subject to judgment and actual results could differ from those estimates, management believes that the estimates used in the preparation of the consolidated financial statements are reasonable.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
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| Contract asset and liabilities | d) Contract asset and liabilities
A contract asset (unbilled revenue) is the right to receive consideration in exchange for goods or services transferred to the customer. When the Company satisfies its performance obligation by transferring goods or services to a customer before the customer pays consideration, or before payment becomes due, a contract asset is recognized for the earned consideration.
Contract liabilities consist of amounts paid by the Company’s customers for which the associated performance obligations have not been satisfied and revenue has not been recognized based on the Company’s revenue recognition criteria described above.
Contract liabilities are classified as current in the consolidated balance sheet when the revenue recognition associated with the related customer payments and invoicing is expected to occur within one year of the balance sheet date and as long-term when the revenue recognition associated with the related customer payments and invoicing is expected to occur in more than one year from the balance sheet date.
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
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| Cash and cash equivalents | e) Cash and cash equivalents
Cash and cash equivalents primarily represent cash balances in current bank accounts. The Company considers all short-term deposits with an original maturity of three months or less, when purchased, to be cash equivalents.
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| Restricted cash and cash equivalents | f) Restricted cash and cash equivalents
Restricted cash and cash equivalents are pledged as security for contractual arrangements. Restricted cash and cash equivalents are classified as current and noncurrent assets based on the term of the remaining restriction.
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| Concentration of credit risk | g) Concentration of credit risk
Financial instruments that potentially subject the Company to concentration of credit risk are reflected principally in cash and cash equivalents, investment in equity securities and accounts receivable. The Company places its cash and cash equivalents and funds with banks that have high credit ratings, limits the amount of credit exposure with any one bank and conducts ongoing evaluations of the creditworthiness of the corporations and banks with which it does business. The Company holds cash and cash equivalent concentrations in financial institutions around the world in excess of federally insured limits. The Company has not experienced any losses to date related to these concentrations.
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| Accounts receivable, net | h) Accounts receivable, net
Accounts receivable from contracts with customers are recorded at the invoiced amounts. The Company recognizes an allowance for credit losses in accordance with ASC 326 using the Current Expected Credit Loss (CECL) model. The allowance reflects management’s estimate of lifetime expected credit losses based on historical experience, current conditions, and reasonable and supportable forecasts.
The Company applies the aging method and the simplified approach permitted under ASC 326 for trade receivables. Receivables are evaluated on a collective basis, and loss rates are determined based on the aging of balances. Historical loss rates are updated periodically. Based on the Company’s assessment, historical loss experience continues to provide the most reliable basis for estimating expected credit losses.
Receivables are written off when they are deemed uncollectible, with the corresponding amount charged against the allowance for credit losses. Recoveries of amounts previously written off are recognized when received and recorded as a reduction to the provision for credit losses. The provision is presented within noninterest expense—general and administrative in the consolidated statements of operations and comprehensive income (loss).
Management reviews the allowance for credit losses regularly. Changes in estimates or assumptions, or updates to customer-specific facts and circumstances, may result in adjustments to the allowance in the period such changes occur.
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| Property and equipment | i) Property and equipment
Property and equipment represents the costs of furniture and fixtures, office and computer equipment, and leasehold improvements. Property and equipment cost also includes any costs necessarily incurred to bring assets to the condition and location necessary for its intended use. Property and equipment are stated at cost, less accumulated depreciation and impairment losses. Depreciation is calculated using declining balance method over the assets’ estimated useful lives as follows:
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
Leasehold improvements related to office facilities are depreciated over the shorter of the lease term or the estimated useful life of the improvement.
The Company reviews the remaining estimated useful lives of its property and equipment on an ongoing basis. Management is required to use judgment in determining the estimated useful lives of such assets. Changes in circumstances such as technological advances, changes to the Company’s business model, changes in the Company’s business strategy, or changes in the planned use of property and equipment could result in the actual useful lives differing from the Company’s current estimates. In cases where the Company determines that the estimated useful life of property and equipment should be shortened or extended, the Company would apply the new estimated useful life prospectively.
The Company reviews property and equipment for impairment when events or circumstances indicate the carrying amount may not be recoverable.
Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in operating expenses.
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| Intangible assets, net | j) Intangible assets, net
The Company capitalizes costs incurred on its internal-use software during the application development stage as intangibles under development. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Once the developed software is available for intended use, capitalization ceases, and the Company estimates the useful life of the asset and begins amortization.
Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three years and up to five.
The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
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| Leases | k) Leases
The Company accounts for leases in accordance with Accounting Standards Codification (“ASC”) 842, “Leases” (“ASC 842”). The Company elected the “package of practical expedients,” which permits us not to reassess under ASC 842 our prior conclusions about lease identification, lease classification and initial direct costs. The Company made a policy election not to separate non-lease components from lease components, therefore, the Company accounts for lease and non-lease components as a single lease component. The Company also elected the short-term lease recognition exemption for all leases that qualify.
The Company determines if a contract contains a lease at inception of the arrangement based on whether the Company has the right to obtain substantially all of the economic benefits from the use of an identified asset and whether it has the right to direct the use of an identified asset in exchange for consideration, which relates to an asset which the Company does not own. Right of use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets are recognized as the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate (“IBR”), because the interest rate implicit in most of its leases is not readily determinable. The IBR is a hypothetical rate based on our understanding of what the Company’s credit rating would be to borrow and resulting interest it would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. Lease payments may be fixed or variable; however, only fixed payments or in-substance fixed payments are included in the Company’s lease liability calculation. Variable lease payments may include costs such as common area maintenance, utilities, real estate taxes or other costs. Variable lease payments are recognized in operating expenses in the period in which the obligation for those payments are incurred.
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
Operating leases are included in operating lease ROU assets, short-term operating lease liabilities, current and long-term operating lease liabilities, non-current on the Company’s consolidated balance sheets. Finance leases are included in property and equipment, net, accrued and other current liabilities, and other long-term liabilities on the Company’s consolidated balance sheets. For operating leases, lease expense is recognized on a straight-line basis in operations over the lease term. For finance leases, lease expense is recognized as depreciation and interest; depreciation on a straight-line basis over the lease term and interest using the effective interest method.
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| Fair value measurements and financial instruments | l) Fair value measurements and financial instruments
The Company holds financial instruments that are measured and disclosed at fair value. Fair value is determined in accordance with a fair value hierarchy that prioritizes the inputs and assumptions used, and the valuation techniques used to measure fair value. The three levels of the fair value hierarchy are described as follows:
The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and established a fair value hierarchy based on the inputs used to measure fair value. The recorded amounts of certain financial instruments, including cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses and other liabilities approximate fair value due to their relatively short maturities.
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| Business combination and asset acquisition | m) Business combination and asset acquisition
The Company accounts for an acquisition as a business combination if the assets acquired and liabilities assumed in the transaction constitute a business in accordance with ASC Topic 805 “Business Combinations.” Such acquisitions are accounted using the acquisition method i.e., by recognizing the identifiable tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the acquired business, measured at their acquisition date fair values. Where the set of assets acquired and liabilities assumed do not constitute a business, it is accounted for as an asset acquisition where the individual assets and liabilities are recorded at their respective relative fair values corresponding to the consideration transferred.
Where the set of assets acquired and liabilities assumed does not constitute a business as defined under ASC 805, the transaction is accounted for as an asset acquisition. In such cases, the Company allocates the purchase price to the individual identifiable assets acquired and liabilities assumed based on their relative fair values at the acquisition date. No goodwill is recognized in an asset acquisition. The assets recognized through the purchase price allocation are expected to provide economic benefits to the Company through future cash flows, cost efficiencies, or strategic advantages associated with the acquired assets. These assets are subsequently measured and amortized or depreciated in accordance with the Company’s accounting policies applicable to the respective asset classes.
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| Goodwill | n) Goodwill
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business acquisitions accounted for using the acquisition method of accounting and is not amortized. Goodwill is measured and tested for impairment on an annual basis in accordance with ASC 350, Intangibles - Goodwill and Other, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Such events and changes may include: significant changes in performance related to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in our business strategy.
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
The Company’s test for goodwill impairment starts with a qualitative assessment to determine whether it is necessary to perform the quantitative goodwill impairment test. If qualitative factors indicate that the fair value of the reporting unit is more likely than not less than its carrying amount, then a quantitative goodwill impairment test is performed. For the purposes of impairment testing, the Company determined that it has five reporting units.
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| Foreign currency | o) Foreign currency
The Company’s consolidated financial statements are reported in U.S. Dollars (“USD”), the Parent Company’s functional currency. The functional currency for the Company’s subsidiaries in India is the Indian Rupee (“INR”), the functional currency of the Company’s subsidiary in the United Kingdom is the British Pound Sterling (“GBP”), and the functional currency of the Company’s subsidiary in the People’s Republic of China is the Chinese Renminbi (“RMB”). The translation of the functional currency of the Company’s subsidiaries into USD is performed for balance sheet accounts using the exchange rates in effect as of the balance sheet date and for revenues and expense accounts using an average exchange rate prevailing during the respective period. The gains or losses resulting from such translation are reported as currency translation adjustments (“CTA”) under other comprehensive income/loss, or under accumulated other comprehensive income/loss as a separate component of equity.
Monetary assets and liabilities of the Company and its subsidiaries that are denominated in currencies other than the subsidiary’s functional currency are translated into their respective functional currency at the rates of exchange prevailing on the balance sheet date. Transactions of the Company and its subsidiaries that are denominated in currencies other than the subsidiary’s functional currency are translated into the respective functional currencies at the average exchange rate prevailing during the period of the transaction. The gains or losses resulting from foreign currency transactions are included in the consolidated statements of operations.
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| Employee benefit plans | p) Employee benefit plans
Contributions to defined contribution plans are charged to consolidated statements of operations in the period in which services are rendered by the covered employees. Current service costs for defined benefit plans are accrued in the period to which they relate. The liability from defined benefit plans is calculated annually by the Company using the projected unit credit method. Prior service cost, if any, resulting from an amendment to a plan is recognized and amortized over the remaining period of service of the covered employees.
The Company records annual amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, future compensation increases and attrition rates. The Company reviews its assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is appropriate to do so. The effect of modifications to those assumptions is recorded in its entirety immediately. The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience and market conditions.
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| Inventories | q) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method (FIFO) for all inventories.
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| Income taxes | r) Income taxes
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements. In estimating future tax consequences, generally all expected future events other than enactments or changes in the tax law or rates are considered.
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
The Company accounts for uncertainty in tax positions recognized in the consolidated financial statements by recognizing a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized.
Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and for all operating loss and tax credit carryforwards, if any. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax laws or rates is recognized in the consolidated statement of income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward periods available under the applicable tax law.
The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company’s judgment regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute the business plans and/or tax planning strategies. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed.
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| Loss per share attributable to Ordinary shareholders |
Basic net loss per ordinary share is computed by dividing the net loss available to ordinary shareholders (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the period. Diluted net loss per ordinary share is computed by dividing the net loss available to ordinary shareholders by the weighted average number of ordinary shares and potential ordinary shares outstanding when the impact is not antidilutive. Potential ordinary shares from stock options, unvested restricted stock units and ordinary share warrants are computed using the treasury stock method. Contingently issuable shares are included in basic net loss per share only when there is no circumstance under which those shares would not be issued. Shares issuable for little or no cash consideration shall be considered outstanding ordinary shares and included in the computations of basic and diluted net loss per share.
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| Public and Private Warrants. | t) Public and Private Warrants.
In connection with Vahanna’s initial public offering in 2021, 10,004,994 public warrants were issued (the “Public Warrants”) and 9,152,087 warrants were issued in a private placement (the “Private Placement Warrants”). Both Public Warrants and Private Placement Warrants remained outstanding and became warrants to purchase Ordinary Shares in the Company upon the close of the Business Combination. During the quarter ended December 31, 2025 the Company registered the Private Placement Warrants and Ordinary Shares underlying them, thereby removing all restrictions on the Private Placement Warrants. As a result, the Company is no longer differentiating between the Public and Private Placement Warrants and only uses the term Public Warrants.
The Public Warrants are not accounted for as liabilities. The Public Warrants will not be adjusted for issuances of Ordinary Shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants.
See Note 17 for further information regarding the fair value of the Public Warrants.
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
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| Investments | u) Investments
Mutual Fund
These investments are classified as available-for-sale securities and are measured at fair value based on quoted market prices in accordance with ASC 320 and ASC 820.
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| Non marketable securities | v) Non marketable securities
Equity securities
Equity investments with a readily determinable fair value, other than equity method investments, are measured at fair value with changes in fair value recognized in the consolidated statements of operations. Equity investments without a readily determinable fair value, are measured at cost, less any impairment.
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| Commitments and contingencies | w) Commitments and contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. Recoveries of environmental remediation costs from third parties that are probable of realization are separately recorded as assets and are not offset against the related environmental liability.
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| Revenue | x) Revenue
Revenues consist primarily of revenue from:
The Company recognizes revenue at the time of transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenues cannot be recognized until the performance obligation(s) are satisfied and control is transferred to the customer.
Income from distribution of insurance policies
Insurance policy distribution and brokerage income:
The Company enters into contracts with insurance companies for the purpose of distributing insurance products to end consumers. The Company’s performance obligation under these contracts is to sell insurance policies to earn commissions, brokerage and other fees. Revenue from distribution services is recognized at a point in time when the related services are rendered as per the terms of the agreement with customers. Revenue is disclosed net of the Goods and Service tax charged on such services.
Distribution fee from underwriting and pricing:
The Company enters into contracts with insurance companies for the purpose of underwriting insurance products for the automotive segment including its pricing on behalf of insurers. The risk of underwriting the insurance contract is covered by the insurer and thus the Company is considered as an agent for the purpose of recognizing revenue. The Company’s performance obligation under these contracts is to underwrite and price the policies. The Company generates underwriting fees termed as Managing General Agent fees (MGA fees) on provision of those services. The underwriting fees are determined as a percentage of net insurance premiums payable to the insurer (net of all commissions, royalties, and administration fees). Revenue from underwriting and pricing is recognized upfront based on the point in time i.e., at the time the policy is issued to the customer.
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
IaaS platform enabled services:
Roadside assistance and extended warranty income:
The Company enters into contracts with insurance companies and other subscribers in order to provide roadside assistance services and extended warranty services to their policyholders/subscribers. The Company’s performance obligation under these contracts is to provide roadside assistance and extended warranty services as a stand ready obligation. The Company is the primary obligor in these transactions and has latitude in establishing prices and selecting and contracting with suppliers, and is accordingly considered as principal for the purpose of recognizing gross revenue. Revenue from roadside assistance is recorded both at the time of completion of service and in some cases it is recorded over the tenure of the contract. Revenue from extended warranty services is recorded over the tenure of contract.
Inspection income:
The Company enters into contracts with insurance companies to inspect vehicles for accident claims made by their policyholders. The Company’s performance obligation under these contracts is to inspect and assist in assessing claims for and on behalf of the customers, i.e. the insurance companies. The Company engages with multiple vendors to provide these services in different geographies. The Company is the primary obligor in the transaction and has latitude in establishing prices, and selecting and contracting with suppliers, and is accordingly considered as principal for the purpose of recognizing revenue. Revenue from inspection and risk assessment is recorded when the inspections are conducted.
Administration fee from insurance support and service plan administration:
The Company enters into contracts with insurance companies and OEMs to provide insurance support and service plan administration, including premium collection, policy administration, claims processing, customer support, and warranty program management. These services represent a single stand-ready performance obligation that is satisfied over time, with revenue recognized ratably over the contract term (typically one to seven years) as services are continuously provided. The Company acts solely as an agent on behalf of insurers and OEMs, with the underlying insurance and warranty obligations remaining with the principals. Accordingly, the Company recognizes only the administration or management fees it retains as revenue, while claims-related activities are performed as part of its administrative services and do not represent separate performance obligations.
Claims revenue from repairs
The Company enters into contracts with garages primarily for the facilitation of vehicle repairs and the administration of insurance claim processes on behalf of its customers. The Company’s performance obligation under these arrangements is to administer and coordinate the vehicle repair process and to facilitate the submission and processing of related claims. The Company controls the entire end to end process of claims before the repaired vehicle is transferred to the customer. Revenue arising from claims on vehicle repair services is recognized at a point in time, upon completion of the vehicle repair, which is the point at which the performance obligation is considered satisfied. The Company also earns commissions from on-boarding new garages.
Software development services
Arrangements with customers for software development services are either on a fixed-price, fixed-timeframe or time-based.
Revenue on time-based service contracts are recognized as the related services are performed and the customers are billed based on the actual time incurred by personnel allocated at contractual billing rates. Revenue from the end of the last invoicing to the reporting date is recognized as accrued income. Revenue from fixed-price and fixed-timeframe contracts, where the performance obligations are satisfied over time, revenue is recognized as and when the milestones are satisfied.
Subscription to software
Revenue is recognized on a straight-line basis over the contractual subscription period. For the Upfront fees or One time usage revenue is recognized at the point of sale
DrivebuddyAI
Revenue is recognized to the extent it is probable that the future economic benefits will flow to the Company and revenue can be reliably measured. Revenue from operations is recognized in statement of Profit and Loss on an accrual basis as state below:
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
Income from Trading of spare parts
Revenue from the sale of spare parts is recognized at a point in time when control of the parts is transferred to the customer, which is generally upon dispatch or delivery of the goods depending on the shipping terms. Revenue is measured based on the consideration specified in a contract with a customer, net of returns and trade discounts.
Fleet damage protection and administration revenue
The Company enters into contracts with distributors for the provision of damage protection and administration programs to their customers. The Company’s performance obligation is to design and structure the program and place the related cover, together with preparing supporting documentation. Revenue arising from program fees is recognized at a point in time at the inception of coverage.
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| Expenses | y) Expenses
Set forth below is a brief description of the components of the Company’s expenses:
i. Cost of services
The cost of services for the Company’s distribution business includes employee related expenses directly involved in generating and servicing revenue and other direct expenses related to facilities.
For the Company’s IaaS platform-based services cost of revenue primarily consists of direct costs incurred for delivering the services to customers and the cost of onsite engineering support for roadside assistance, employee related expenses, risk assessment expenses and other direct expenses. Amounts incurred towards vendors/suppliers for inspections and roadside assistance also form part of direct cost. Cost of services also includes cost of telematics devices sold through different subscription or upfront sale model.
Cost of services are recognized as they are incurred.
Sales expenses includes costs related to brokerage income which is derived from sale of insurance policies such as broker expenses, cost of sales, promotion expense, and travel and entertainment expenses. Broker expense is the compensation paid to our channel partners when an insurance policy is written through a broker relationship. This function also includes expenses incurred directly or indirectly for selling and marketing a product or service and costs spent on/by personnel employed under the sales or marketing departments and share based compensation expenses. These expenses also include marketing efforts made by the Company to expand its market reach for distributing insurance policies. The expenses include advertisements through different mediums to reach end customers of insurance policies to enhance awareness and educate end customers.
General and administrative expenses include personnel costs for corporate, finance, legal and other support staff, including bonus and share based compensation expenses, professional fees, allowance for doubtful accounts and other corporate expenses.
Research and development expense consists of personnel costs incurred by the technology development team, subscription costs and other costs associated with ongoing improvements to and maintenance of internally developed software, share based compensation expenses and allocation of certain corporate costs.
Roadzen Inc. Notes to the consolidated financial statements (in US $, except share count)
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| Recently issued accounting pronouncements and not yet adopted | z) Recently issued accounting pronouncements and not yet adopted
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of the extended transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards election, the Company will not be subject to the same implementation timeline for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of the Company’s financial statements to those of other public companies more difficult.
There are no other new accounting standards identified and not yet implemented that are expected to have a material effect on the Company’s consolidated financial statements.
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| Recent Accounting Pronouncements - Accounting Standards Adopted | aa) Recent Accounting Pronouncements - Accounting Standards Adopted
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions,” which (1) clarifies the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) amends a related illustrative example, and (3) introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The Company adopted ASU 2022-03 effective April 1, 2025 on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. |