Gojek Singapore, the main investor of Pathao, has reported a tenfold increase in Y-o-Y loss, of which most was attributed from investment in Pathao, in a move to clean up its ledger books. Tech in Asia, a leading startup & tech news media reported recently that Gojek's losses before income taxes were around $28.6 million out of which Pathao contributed $17 million. In the financial statement, these "convertible notes" to Pathao were written off as "impairment loss".
According to accounting experts, impairment loss means the drastic reduction or decline in the value of an asset when compared to the current book value. The aforementioned asset can be tangible (fixed or even capital assets) or intangible (goodwill, patents etc.) in nature. Experts also mentioned that impairment loss does not always necessarily mean a decline in business as it can happen due to other macro-economic factors as well, i.e. corporate restructuring, legal issues, economic condition etc. In some cases, these losses are shown to make a firm more appealing for merger or acquisition or even public listing.
When contacted for comments, Pathao, in a press release issued today, said: "The article refers to an accounting treatment made by Gojek over a year ago in May 2019, related to its investment in Pathao, as reported in Gojek's financial statements for 2019. Gojek continues to be one of Pathao's major shareholders."
This news comes out when Gojek, the largest ride-hailing venture of Indonesia, is in talks with Tokomedia, another Indonesian tech giant to thwart impending attacks from Shopee, Singaporean multinational e-commerce, and Grab, southeast Asia's first decacorn (startup valuing more than $10 billion). Industry analysts suggest the move was made by Gojek to make their books more appealing for impending merger or public listing.
Kevin Aluwi, the co-CEO and co-founder of Gojek, did not respond to the request for comments while this report was filed at 2:45pm today.