# Financial Model Revision after Missed Revenue Targets

Published: 03 Nov 2026
Author: Treelife
Practice area: Finance
Tags: committed and stretch forecast, financial model revision, missed revenue targets, plan versus actual bridge, revenue reforecast, revenue shortfall analysis, startup board reforecast India
Source: https://treelife.in/finance/financial-model-revision-after-missed-revenue-targets/

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Blog Content Overview

- [0.1 What should you change in a financial model after missing revenue targets?](#What_should_you_change_in_a_financial_model_after_missing_revenue_targets)

- [1 Plan, outlook and re-forecast: what a financial model revision changes](#Plan_outlook_and_re-forecast_what_a_financial_model_revision_changes)
- [2 How do you diagnose a revenue shortfall before revising the financial model?](#How_do_you_diagnose_a_revenue_shortfall_before_revising_the_financial_model)
[2.1 Attribute the miss to a cause first](#Attribute_the_miss_to_a_cause_first)
- [2.2 Then decompose the gap by component](#Then_decompose_the_gap_by_component)
- [2.3 Adjust for calendar effects before reading the gap](#Adjust_for_calendar_effects_before_reading_the_gap)

- [3 Re-baselining unit economics after a revenue miss](#Re-baselining_unit_economics_after_a_revenue_miss)
- [4 Rebase or re-phase: setting committed and stretch numbers in the reforecast](#Rebase_or_re-phase_setting_committed_and_stretch_numbers_in_the_reforecast)
[4.1 Recover or re-forecast?](#Recover_or_re-forecast)
- [4.2 Committed, stretch and downside](#Committed_stretch_and_downside)

- [5 Re-cutting cost, hiring and runway in the revised financial model](#Re-cutting_cost_hiring_and_runway_in_the_revised_financial_model)
- [6 Resetting sales quotas, incentives and team targets after a revenue miss](#Resetting_sales_quotas_incentives_and_team_targets_after_a_revenue_miss)
- [7 Which legal and investor triggers does a revised forecast set off in India?](#Which_legal_and_investor_triggers_does_a_revised_forecast_set_off_in_India)
- [8 How a revised financial model affects the next fundraise](#How_a_revised_financial_model_affects_the_next_fundraise)
- [9 How to present a revised business plan to investors and the board](#How_to_present_a_revised_business_plan_to_investors_and_the_board)
[9.1 A 10-working-day revision workflow](#A_10-working-day_revision_workflow)

- [10 Common mistakes that cost founders time and money](#Common_mistakes_that_cost_founders_time_and_money)
- [11 Treelife practitioner note](#Treelife_practitioner_note)
- [12 Frequently asked questions](#Frequently_asked_questions)

A financial model revision after missed revenue targets is the rebuild that follows once the re-forecast trigger has fired and the old plan can no longer guide hiring, spend or fundraising. In India, the revised model does more than reset internal targets. It feeds board approvals under the shareholders’ agreement, valuation reports for the next round, lender covenant tests, sales incentive plans and the auditor’s going concern review. This guide covers how to attribute the miss, re-baseline unit economics, set committed and stretch numbers, recut cost and runway, and handle every party that relied on the old plan.

### What should you change in a financial model after missing revenue targets?

Change the drivers that caused the miss, not the revenue total. Attribute the shortfall to a planning, delivery or external cause, split it into volume, price, mix, timing and churn, and rebase only drivers with two or more periods of contrary evidence. Then re-baseline unit economics, recut hiring and spend, recompute runway and check which shareholder, lender, FEMA valuation and audit positions relied on the old plan.

## Plan, outlook and re-forecast: what a financial model revision changes

A model revision is a formal re-forecast: a new baseline the board approves, replacing the operating plan for decisions while the original plan stays on file for comparison. It differs from an outlook, which is management’s informal read on how the year will land and needs no approval.

Founders often blur three documents, and boards notice:

- The approved plan (annual operating budget) is fixed once the board approves it. It stays the reference point for the year, even after a revision.

- The outlook is the CEO’s current view of where the year will land. It moves every month and does not need approval.

- The re-forecast is a formal replacement baseline for spend, hiring and cash decisions. If the board approved the plan, it approves the re-forecast.

One rule from board practice carries through every section below. Never delete the original plan. Freeze it as a dated version, and show it beside actuals and the re-forecast in every pack until the year closes.

## How do you diagnose a revenue shortfall before revising the financial model?

Revenue shortfall analysis answers two questions: why the miss happened (a planning assumption, a delivery failure or an external change) and where it sits (volume, price, mix, timing, churn or recognition). Planning errors change the model’s assumptions, delivery failures change the recovery plan, and only external changes justify rethinking the business model itself.

### Attribute the miss to a cause first

**Table 1: Three causes of a revenue miss and what each changes**

CauseTypical Indian exampleEvidence that confirms itModel responsePlanning assumptionPlan assumed enterprise conversion would double after Series A with no added sales capacityActual conversion, ticket size and CAC in line with the company’s own trailing 12 monthsRebase the driver; keep cost logicDelivery failureGST-compliant e-invoicing integration slipped two months, delaying go-live for signed clientsOne identifiable driver below trailing history, with a dated causeRe-phase that driver; name an owner and recovery dateExternal changeSector-wide slowdown in client hiring or funding, a regulatory change hitting customersCustomer churn reasons, sector funding data and pipeline age move togetherRebase revenue and cost together; revisit market size

Most misses mix causes. Give the board an estimated share for each (illustrative: half from the planning assumption, a third from the delayed integration, the rest external), and mark which shares are estimates.

### Then decompose the gap by component

Run the decomposition on the ledger, not the CRM. The CRM shows bookings; the books show revenue recognised under Ind AS 115 (Revenue from Contracts with Customers), and the two differ wherever contracts carry milestones, implementation periods or annual prepayments. Treelife’s [Ind AS 115 guide for SaaS and subscription businesses](https://treelife.in/finance/ind-as-115-revenue-recognition-for-saas-and-subscription-businesses/) covers the recognition rules.

- Volume: fewer customers, orders or units. Trace to leads, conversion rate and sales capacity.

- Price: lower realised price from discounting, downgrades or annual billing discounts.

- Mix: the right volume in the wrong product, channel or city, with a lower ticket or margin.

- Timing: deals that closed late, or revenue deferred under Ind AS 115.

- Churn and contraction: existing revenue lost faster than modelled.

- Recognition and leakage: credit notes under Section 34 of the Central Goods and Services Tax Act, 2017, billing corrections, unbilled revenue or disputes.

**Table 2: Shortfall components, evidence and model change**

ComponentEvidence to pullWhat changes in the modelRebase or re-phaseVolumeFunnel by stage, rep productivity, lead source dataConversion rates, sales capacity, ramp timeRebase if conversion is down two periods runningPriceInvoice-level realised price, discount registerAverage selling price, discount assumptionRebaseMixRevenue by SKU, channel, cityMix percentages and blended marginRebaseTimingSigned contracts with later start dates, Ind AS 115 schedulesMonthly phasing onlyRe-phaseChurnCohort retention tables, cancellation reasonsRetention curve, net revenue retentionRebaseRecognitionCredit notes, deferred revenue roll-forwardRecognition schedule, billing controlsFix process, then re-phase

### Adjust for calendar effects before reading the gap

Indian revenue curves carry calendar shifts that distort period comparisons. Diwali moves between October and November, so festive demand can land in a different quarter from the prior year. Enterprise buyers often release budgets in January to March before their own year closes on 31/03. GST rate changes notified on the recommendation of the GST Council can pull purchases forward or push them back. Adjust the plan and the actuals for these before calling any part of the gap structural.

The output of this section is a plan versus actual bridge: plan revenue, less each component, equals actual revenue. If the components do not sum to the gap, the diagnosis is incomplete and the revision should wait. Driver tree and cohort build mechanics are in Treelife’s [revenue forecast model development](https://treelife.in/finance/revenue-forecast-model-development/) guide and are not repeated here.

## Re-baselining unit economics after a revenue miss

A revenue miss usually hides a unit economics shift, so the revised model must re-baseline margin, acquisition cost and capital efficiency from actuals before any revenue target is reset. A plan rewritten only in revenue terms repeats the mistake at a lower level.

Re-baseline these from the last two to three quarters of actuals, each with a date and a source:

- Gross margin after GST-exclusive pricing, payment gateway fees and delivery cost, by product line.

- Customer acquisition cost (CAC) by channel, with its monthly trend over the period.

- CAC payback in months, using observed cohort retention rather than the plan’s curve.

- Contracted and renewal revenue already in hand for the next four quarters.

- Burn multiple (net burn divided by net new revenue), which follow-on investors read early.

The definitions and cohort method are covered in Treelife’s [SaaS CAC, LTV and churn model development](https://treelife.in/finance/saas-cac-ltv-churn-model-development/) guide. For a revision, the point is narrower: every driver in the revised model should trace to one of these re-baselined figures, not to the original plan.

## Rebase or re-phase: setting committed and stretch numbers in the reforecast

Rebase a driver when evidence shows the assumption was wrong; re-phase when the assumption holds but the dates moved. Then set two numbers rather than one: a committed number the board plans cash against, built from re-baselined drivers, and a stretch number above it with named actions and owners.

The common error is to re-phase everything and stack the missed amount onto the remaining months as a catch-up target. It feels better in the board meeting and preserves the year-end number on paper. If the cause was structural, the catch-up plan guarantees a second miss, and a second revision costs more credibility than the first. Board members track serial revisions closely; lowering a target every quarter reads as moving the goalposts.

Use these tests for each driver:

- Two or more consecutive periods of contrary actuals: rebase.

- One period with a documented one-off cause (a delayed enterprise deal, a platform outage, a festive-season shift): re-phase.

- A market-wide change visible in competitor data or customer feedback: rebase and revisit total addressable market assumptions.

- A change you control but have not yet run (new pricing, a sales hire): keep it out of the committed number until one period of actuals supports it.

### Recover or re-forecast?

Before rebuilding, test whether the year can still be recovered. If the gap is mostly execution error with a known fix and the remaining months have enough capacity, keep the plan, publish a recovery plan with owners and dates, and report against both. If the gap is mostly forecasting error or market shift, recovery is a hope rather than a plan, and the model needs a re-forecast.

### Committed, stretch and downside

Build three cases. The committed case uses rebased drivers only. The stretch case adds the recovery actions, each with an owner, a date and the driver it moves. The downside case applies the observed miss rate again for two quarters. Present ranges with confidence levels rather than a single point (for example, a committed figure held with high confidence and a stretch figure that depends on two named deals). Treelife’s [scenario and sensitivity model development](https://treelife.in/finance/scenario-and-sensitivity-model-development/) guide covers the scenario switch and output tables.

Agree, at the same meeting, the evidence that would move either number at the next checkpoint (for example, CAC above the new baseline for six straight weeks, or a delayed launch recovering early). With pre-agreed triggers, the next review is a check against the memo, not a rerun of the debate.

## Re-cutting cost, hiring and runway in the revised financial model

Every rebased revenue line must pass through to variable cost, hiring, working capital and cash. A revised model that lowers revenue but keeps the original hiring plan overstates runway, and runway is the number the board acts on first. Plan cash only against the committed case.

Work through the cost base in this order:

- Variable costs linked to revenue: payment gateway charges, logistics, COGS, commissions.

- Committed costs: signed leases, annual software contracts, notice periods. These set the floor of the burn.

- Hiring plan: open roles not yet offered can be deferred; withdrawing made offers carries legal and reputational cost.

- Marketing: separate brand spend from performance spend, and cut performance spend only where channel payback has worsened.

- Working capital: lower revenue often comes with slower collections. Re-test debtor and creditor days. Payments to micro and small enterprise suppliers are capped at 45 days under Section 15 of the Micro, Small and Medium Enterprises Development Act, 2006, and a late payment is not deductible until actually paid under Section 37(2)(g) of the Income-tax Act, 2025 (formerly Section 43B(h) of the Income-tax Act, 1961).

Then recompute runway on the committed case as months of net burn covered by cash, less a reserve for statutory dues and wind-down costs. The method is in Treelife’s guide to [burn rate and runway calculation](https://treelife.in/finance/burn-rate-runway-calculation-for-startups-in-india/), and the 13-week view sits in [cash flow forecasting](https://treelife.in/finance/cash-flow-forecasting-for-startups/). If revised runway falls below six months, the revision has become a runway crisis, and the reporting and director-duty steps in Treelife’s [cash burn reporting during a runway crisis](https://treelife.in/finance/cash-burn-reporting-during-a-runway-crisis/) guide apply from that point.

## Resetting sales quotas, incentives and team targets after a revenue miss

The revised model must flow into sales quotas, incentive plans and team OKRs in the same cycle, or the sales team keeps chasing the old number while finance plans against the new one. Two plans running at once is how a second miss starts.

Three issues come up in almost every revision:

- Quotas and variable pay. If quotas stay at the old plan, most of the team falls out of commission for the rest of the year and attrition rises. If quotas fall to the committed number, payout per rupee of revenue rises. Check what the incentive plan document allows: many Indian sales incentive plans reserve the company’s right to revise targets mid-year, but changes applied retrospectively to earned commission invite disputes.

- Pull-forward behaviour. When a team privately writes off a target, invoices get raised early, discounts deepen near period end, and distributors are loaded with stock. Under Ind AS 115, revenue on goods shipped with liberal return rights or on undelivered services may not be recognisable, and later reversals need GST credit notes under Section 34 of the CGST Act, 2017. Watch for spikes in the last week of each month and in credit notes the following month.

- Team communication. Share the committed number and the reasons for the revision with the team that has to deliver it. A target the team believes in usually beats an aggressive one it has already written off.

## Which legal and investor triggers does a revised forecast set off in India?

A revised forecast can trigger reserved-matter approvals under the shareholders’ agreement, tranche conditions in the share subscription agreement, lender covenant tests, fresh valuation requirements for any share issue, performance-vesting reviews under the ESOP scheme and the auditor’s going concern and impairment work. Map each one before the revised plan leaves the finance team.

The old plan was not only an internal document. Investors priced a round on it, lenders set covenants against it, and a valuer may have used it in a discounted cash flow (DCF) report.

**Table 3: Who relied on the old plan, and what the revision triggers**

Counterparty or documentWhat the old plan supportedWhat the revision triggersReferenceShareholders’ agreementAnnual budget and business plan approvalRevised budget often a reserved matter needing investor consent; information rights may require prompt notice of material deviationContract terms; SHA reserved matters scheduleShare subscription agreement with tranchesRevenue or ARR milestones for later tranchesTranche may not be due; waiver or amendment needed in writingContract termsBank or venture debtFinancial covenants (minimum revenue, cash, debt service cover)Covenant test may fail on revised numbers; early notice usually cheaper than a breachFacility agreementNext equity round with non-resident investorsPrior DCF valuationFresh valuation on the revised plan; issue price to non-residents must not be below fair valueRule 21, Foreign Exchange Management (Non-debt Instruments) Rules, 2019Preferential allotment to any investorRegistered valuer reportFresh valuation report on current projectionsSection 62(1)(c), Companies Act, 2013 read with Rule 13, Companies (Share Capital and Debentures) Rules, 2014ESOP scheme with performance vestingRevenue-linked vesting conditionsVesting may lapse; any variation needs a special resolution and must not prejudice option holdersRule 12, Companies (Share Capital and Debentures) Rules, 2014Statutory auditorProjections used in going concern and impairment testsRevised projections reviewed for going concern and impairment of goodwill or intangiblesSA 570 (Revised); Ind AS 36 where applicable

Three points need specific attention.

First, FEMA pricing. Under Rule 21 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, shares issued by an unlisted Indian company to a non-resident must be priced at or above fair value determined by an internationally accepted pricing methodology, certified by a chartered accountant, a SEBI-registered merchant banker or a practising cost accountant. Most such reports use DCF on management projections. A valuation built on the pre-miss plan should not be reused once the board has replaced that plan; the valuer will ask for the current model.

Second, angel tax. Section 56(2)(viib) of the Income-tax Act, 1961 does not apply on or after 01/04/2025 following the Finance (No. 2) Act, 2024, and the Income-tax Act, 2025, in force from 01/04/2026, does not carry an equivalent provision. A down-revised plan therefore creates no income tax exposure on share premium for new issues. Assessments for earlier years still run under the old provision, so keep the original projections and valuation reports on file.

Third, board process. Many SHAs make the annual budget a board-level or investor-consent item. Approve the re-forecast by board resolution, minute the cause attribution and diagnosis, and file the old and new plans together. The minutes become evidence that directors acted on current information, which matters under Section 166 of the Companies Act, 2013 (duties of directors) if the company later runs into difficulty. Treelife’s note on [resolutions in board and general meetings](https://treelife.in/compliance/resolutions-in-a-board-meeting-and-general-meeting/) covers the resolution types.

## How a revised financial model affects the next fundraise

The revised model becomes the base for the next round’s valuation, so a revision made six months before a raise sets the price range investors will anchor on. A credible committed case that the company then beats is worth more in diligence than an optimistic plan that misses again.

Four consequences follow:

- Valuation. A lower revenue curve lowers DCF-based fair value and usually the floor price for non-resident issues under Rule 21. Founders should model the round size against the committed case, not the stretch case.

- Down round mechanics. If the next price is below the last round, anti-dilution clauses in the SHA adjust existing investors’ conversion ratios. Model the effect on the cap table before agreeing the price; Treelife’s guide to [full ratchet versus weighted average anti-dilution](https://treelife.in/finance/full-ratchet-versus-weighted-average-anti-dilution-on-a-real-cap-table/) works through a real cap table.

- Round type. A short runway on the committed case may favour a bridge from existing investors over a priced round; see [bridge round versus priced round](https://treelife.in/finance/bridge-round-vs-priced-round/).

- Data room. Diligence teams compare the plan they are shown with prior board packs. Keep the original plan, the bridge and the board minutes approving the re-forecast together, and run the revised model through [financial model validation before a data room](https://treelife.in/finance/financial-model-validation-before-a-data-room/) or an [assumptions review](https://treelife.in/finance/financial-model-assumptions-review-services/).

> Related reading: Treelife’s guide to [how startup valuation works in India](https://treelife.in/startups/how-startup-valuation-works-in-india/) covers the methods a valuer will apply to the revised plan.

## How to present a revised business plan to investors and the board

Present the revised business plan as a bridge from old plan to new, with the cause split, the evidence and the actions already taken, sent before the meeting. Investors fund founders through bad quarters; they lose confidence when they hear about a miss for the first time in the room or see the same assumption fail twice.

A board pack for a re-forecast should contain:

- A one-page memo: approved plan, actuals, committed and stretch numbers, revised runway date.

- The cause attribution (planning, delivery, external) with estimated shares.

- The plan versus actual bridge by component.

- The re-baselined unit economics figures with sources.

- Rebased and re-phased drivers, with evidence for each.

- The cost, hiring and quota response, with dates and owners.

- The triggers from Table 3 that apply and the proposed handling.

- Pre-agreed checkpoint triggers and the date of the next review.

For the monthly investor update that follows, name the miss in the first lines, give the cause in two or three sentences, state the committed number, and end with the recovery actions and specific asks. Every subsequent update should report against both the approved plan and the re-forecast.

### A 10-working-day revision workflow

- Day 1 to 2: close the books and freeze the current plan as a dated version.

- Day 3 to 4: attribute the cause, run the component decomposition and build the bridge.

- Day 5: re-baseline unit economics and decide rebase or re-phase for each driver.

- Day 6 to 7: build committed, stretch and downside cases; pass revenue through to cost, hiring, quotas and working capital.

- Day 8: recompute runway on the committed case and agree the cost response.

- Day 9: map the Table 3 triggers and draft consent requests, covenant notices or valuer instructions.

- Day 10: circulate the board pack, then approve the re-forecast by board resolution.

## Common mistakes that cost founders time and money

Most costly errors in a reforecast after a revenue miss come from revising the target before diagnosing the cause, or from treating the revised plan as an internal document when contracts and filings relied on the original.

- Moving the revenue total down without changing any driver. It is fast, and the broken assumption survives. Rebuild from drivers.

- Stacking the miss onto the remaining months. The catch-up target protects the year-end number on paper and guarantees a second revision. Use committed and stretch numbers instead.

- Leaving the hiring plan and quotas untouched. The result is an overstated runway and a sales team chasing a number finance has abandoned. Link headcount and quotas to the committed case.

- Reusing an old valuation report for a new issue. A DCF on superseded projections invites questions under Rule 21 of the NDI Rules, 2019 during authorised dealer bank review or diligence. Commission a fresh report.

- Telling lenders after the covenant test date. Late disclosure is often treated more harshly than the breach, and an event of default can accelerate repayment. Notify early and request a waiver or reset.

## Treelife practitioner note

In the financial model revision engagements we have run at Treelife, the revenue number is rarely the hardest part. The harder part is finding everything that was built on the old revenue number. One revised plan can touch the SHA reserved matters schedule, a tranche condition, a venture debt covenant, the sales incentive plan, an ESOP vesting condition and a valuation report used for a FEMA filing, and each sits with a different person.

The pattern we see most often is that the finance team revises the model correctly, the board approves it, and three months later the company starts a bridge round using the valuation report from the previous round. That report was built on projections the board has formally replaced. Under Rule 21 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, the issue price to a non-resident has to rest on a fair value determination, and an AD bank or diligence team comparing dates will see that the valuation predates the revised plan. Fixing it after allotment means a fresh report, possible repricing conversations and delay on the Form FC-GPR filing.

The second pattern is quieter. Revised projections reach the auditor late in the year, and the going concern assessment under SA 570 (Revised) becomes a negotiation in the last week of the audit. Sharing the revised model, the bridge and the board minutes with the auditor as soon as the board approves them removes most of that friction.

Our working rule: the day the board approves a re-forecast, finance opens a trigger register listing every document and counterparty that relied on the old plan, with an owner and a closing date for each.

## Frequently asked questions

**Q: What is the difference between a re-forecast and an outlook?**

**A:** A re-forecast is a formal replacement baseline that the board approves; an outlook is management’s informal view. The approved plan stays on file in both cases and is reported beside actuals for the rest of the year.

**Q: Should we lower the annual revenue target after a miss?**

**A:** Lower the committed number to what rebased drivers support, and keep a stretch number above it with named actions and owners. Cash and hiring plan against the committed number only.

**Q: Does a revised financial model create any income tax issue on share premium?**

**A:** No, for issues on or after 01/04/2025. Section 56(2)(viib) of the Income-tax Act, 1961 ceased to apply from that date under the Finance (No. 2) Act, 2024, and the Income-tax Act, 2025 has no equivalent. Earlier years still apply the old provision.

**Q: Do we need board approval to revise the financial model?**

**A:** For the operating budget, usually yes. Most SHAs make the annual budget a board or investor-consent matter. Pass a board resolution and minute the reasons, which also supports directors under Section 166 of the Companies Act, 2013.

**Q: How long does a financial model revision take?**

**A:** About 10 working days with closed books. Delays usually come from unreconciled revenue or missing funnel data. Lender or investor consents can add two to four weeks.

**Q: What documents are needed to revise the model?**

**A:** Closed monthly financials, invoice-level revenue data, the CRM funnel by stage, cohort retention tables, the hiring plan, the sales incentive plan and every contract that references the plan (SHA, SSA, facility agreement, ESOP scheme, latest valuation report).

**Q: Can we reuse the last valuation report for a new round with a foreign investor?**

**A:** Not if the plan has since been revised. Rule 21 of the FEM (Non-debt Instruments) Rules, 2019 requires the issue price to be at or above fair value, and a DCF on superseded projections is weak evidence. Commission a fresh report.

**Q: Does a revised plan affect Form FC-GPR filing?**

**A:** Indirectly. Form FC-GPR is filed within 30 days of allotment to a non-resident with the valuation certificate. If that certificate rests on outdated projections, the AD bank may raise queries.

**Q: What if a tranche milestone in the SSA is missed?**

**A:** The investor is usually not obliged to fund that tranche. Options are a written waiver, a revised milestone by amendment, or a reduced tranche, documented as an amendment to the SSA and SHA as required.

**Q: What happens if we breach a lender covenant on the revised numbers?**

**A:** The lender can typically declare an event of default and accelerate repayment. Notifying before the test date and seeking a waiver or reset is almost always cheaper.

**Q: Can we cut sales quotas mid-year?**

**A:** Usually, if the incentive plan reserves that right. Apply changes prospectively; revising commission already earned invites disputes.

**Q: How do revised projections affect ESOPs with performance vesting?**

**A:** Revenue-linked vesting may lapse for the period. Varying scheme terms needs a special resolution and must not prejudice option holders under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014.

**Q: Will the auditor look at the revised model?**

**A:** Yes, where going concern or impairment is in question. SA 570 (Revised) requires the auditor to assess management’s going concern evaluation, and Ind AS 36 impairment testing uses cash flow projections where applicable.

**Q: Does a revised plan mean a down round?**

**A:** Not necessarily. It lowers the projections a valuer uses, but price depends on the round. If the price does fall below the last round, SHA anti-dilution clauses adjust existing investors’ conversion terms.

**Q: Is a DPIIT-recognised startup treated differently in a revision?**

**A:** Not for the revision itself. DPIIT recognition mattered most for the old angel tax exemption, which is now redundant for new issues. Section 80-IAC eligibility is unaffected by a revised forecast.

### Related posts:

- [What Is An Income Statement?](https://treelife.in/finance/what-is-an-income-statement/)

- [The Rise & Fall Of Indian IPO’s](https://treelife.in/finance/the-rise-fall-of-indian-ipo/)

- [Tyke’s CSOPs: Bridging Startups with Investors or Crossing Regulatory Boundaries?](https://treelife.in/finance/tykes-csops-bridging-startups-with-investors-or-crossing-regulatory-boundaries/)

- [Revised Valuation Rules for Angel Tax](https://treelife.in/finance/revised-valuation-rules-for-angel-tax/)

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