This Accounting Policy & Tax Position document establishes the financial governance framework for Edukrest Limited, an AI-powered edtech company operating in Nigeria. The document outlines the accounting principles, revenue recognition policies, expense classification framework, tax obligations, and internal control mechanisms adopted by the Company.
The document has been prepared to demonstrate the Company's commitment to financial discipline and transparency — both for internal governance purposes and in support of investor due diligence processes.
Edukrest adopts a framework grounded in financial transparency, consistent record-keeping, and progressive alignment with international accounting standards. All policies are designed to scale with the Company's growth trajectory.
Edukrest operates an AI-powered educational platform targeting schools and individual learners across Nigeria. The Company's revenue model is structured around four primary streams, designed to maximise reach whilst maintaining a sustainable commercial engine.
| Revenue Stream | Description | Billing Cycle | Status |
|---|---|---|---|
| School-Based Payments | Institutional access fees paid by schools for platform deployment across student cohorts | Termly / Quarterly | Active |
| Student Subscriptions | Individual learner subscriptions for access to premium curriculum and AI features | Monthly | Active |
| Freemium Access | Limited free-tier access to core features, designed to drive acquisition and conversion | N/A | Non-Revenue |
| Paid Upgrades | One-time or recurring upgrade payments for premium feature bundles, advanced tools, and extended access | On Activation | Scaling |
Edukrest Limited prepares its financial records on the accrual accounting basis. Under this method, revenues and expenses are recognised in the period in which they are earned or incurred, irrespective of when the corresponding cash is received or paid.
Revenue is recognised in the accounting period in which it is earned — that is, when the service has been delivered or the subscription period has been fulfilled — regardless of the timing of cash receipt.
Expenses are recorded in the period in which they are incurred, matching costs to the revenue they support, in line with the matching principle of accrual accounting.
NOTE: As Edukrest scales, accounting policies may evolve to align with IFRS (International Financial Reporting Standards), particularly in preparation for institutional investment, strategic partnerships, or potential public market activity.
Revenue recognition follows a stream-specific approach, ensuring that income is recorded accurately and in the correct accounting period. The following table defines the recognition basis for each revenue type:
| Revenue Type | Recognition Basis | Timing |
|---|---|---|
| Student Subscriptions | Recognised on a monthly pro-rata basis over the subscription term | Monthly, over service period |
| School Payments | Recognised ratably over the academic term or contracted service period; unearned portion deferred | Over term / quarter |
| Freemium Access | No revenue recognised; freemium is a user acquisition mechanism with zero direct income | N/A |
| Paid Upgrades | Recognised upon activation for one-time upgrades; spread over access duration for time-bound upgrades | On activation / over period |
All Company expenditures are classified into the following categories to ensure accurate cost allocation, financial clarity, and auditable record-keeping:
| Expense Category | Examples | Recognition Timing |
|---|---|---|
| Operational | Cloud hosting, SaaS tools, platform infrastructure, internet services | When service is consumed / billed |
| Personnel | Founder stipends, staff salaries, contractor payments, ESOP-related charges | In the period earned |
| Marketing | Digital advertising, design assets, content production, PR activities | When incurred |
| Administrative | Registration fees, legal costs, office supplies, compliance charges | When incurred |
All financial transactions are conducted through the Company's registered business bank account. Customer payments are collected via a third-party payment gateway, which provides an auditable, timestamped transaction record for each revenue event.
Digital payments are processed through a licensed third-party gateway. All funds are settled to the Company's designated corporate account within standard settlement cycles.
Bank statements are reconciled against internal transaction records on a monthly basis at minimum. Any discrepancies are investigated and resolved promptly. Cash positions are monitored continuously by the Head of Finance.
Edukrest utilises accounting software appropriate to its current operational scale, enabling structured tracking of income, expenditure, and cash flow. The Company is committed to continuous improvement of its financial systems as it grows.
The Company maintains structured financial records across all revenue streams and expense categories. As operations scale, the accounting system will be upgraded to support multi-entity consolidation, automated reconciliation, and investor-grade financial reporting.
Edukrest Limited is incorporated and operates as a registered company in the Federal Republic of Nigeria, and is therefore subject to Nigerian tax law as administered by the Federal Inland Revenue Service (FIRS) and relevant State Internal Revenue Services.
Edukrest is committed to full and timely compliance with all applicable Nigerian tax obligations going forward, including engagement with a qualified tax professional to structure filings appropriately.
| Tax Type | Applicability | Current Status | Notes |
|---|---|---|---|
| Value Added Tax (VAT) | Applicable on eligible digital/education services | In Progress | Collected via gateway; formalisation in progress |
| Company Income Tax (CIT) | Applicable on taxable profits under CITA | Pending Commencement | Filing to commence once income threshold is met |
| Withholding Tax (WHT) | Applicable on contractor and service payments | Pending Commencement | To be deducted and remitted as contractor base grows |
Edukrest maintains an internal control environment designed to safeguard assets, ensure the accuracy of financial records, and prevent unauthorised access to or disbursement of Company funds.
Edukrest produces internal financial reports on a regular basis to support operational decision-making and maintain transparency with the founding team and future investors.
Edukrest acknowledges the financial and regulatory risks inherent in operating as an early-stage startup in a developing market. The Company has adopted a proactive compliance posture — recognising current gaps honestly whilst demonstrating strong intent and a scalable framework to address them systematically as the business grows.
A structured foundation is in place: accounting records are maintained, bank accounts are properly separated, VAT obligations are acknowledged, and a clear compliance roadmap is being executed.
Edukrest Limited is committed to the following milestones as part of its financial maturity roadmap:
This document constitutes an internal accounting policy and tax position framework, prepared for the purposes of internal governance, financial discipline, and investor due diligence. It does not constitute a formal financial statement, audited report, or legally binding tax filing under any applicable jurisdiction.
All policies described herein are subject to revision, update, and formalisation as the Company grows, as regulatory requirements evolve, and upon the engagement of qualified accounting and legal professionals. Readers are advised to treat this document as a living framework and to seek independent financial or legal advice as appropriate.