Starting ARR

Rogue ID: sales.starting_arr Type: Currency Domain: Sales

Definition

Opening ARR at the beginning of the period — the baseline against which the period's ARR waterfall (new + expansion − downgrades − churn) reconciles to ending ARR. Equal to the prior period's closing ARR by construction. The FlowSubform widget binds starting_arr as the start slot of the ARR-bridge flow, and the ending position is computed as start + Σ(deltas). Common pitfall: restating starting_arr mid-period to "fix" a prior-period reporting error breaks the period-over-period audit trail; corrections should land as a separate restatement note, not by editing the opening balance.

Formula

Starting ARR = ARR snapshot at period open = the prior period's closing ARR. Identity that must hold: starting_arr + new_business + expansion − downgrades − churn_arr = ending ARR (sales.arr at period close). Reconcile any gap as a "data quality" line and root-cause it before next period.

Why it matters

The anchor of the ARR waterfall — without an explicit starting point, the period's net-new ARR cannot be audited. Boards expect the waterfall to reconcile to the penny, period over period.

How to interpret

If starting_arr ≠ prior-period ending ARR, there is either a restatement or a data issue — surface it explicitly. Beyond that the value itself is descriptive, not interpretive; the interpretive work happens on the delta lines.

Calculation policy

How an AI agent should compute this KPI from messy company data. Free-text rules consumed at reasoning time — not a deterministic DSL. The most common ways to get this wrong are listed under Common miscomputations.

Inclusion rules

• ARR snapshot at the exact open of the period.
• By identity, equals the prior period's closing ARR (sales.arr at prior period close).

Exclusion rules

• Any in-period activity (new business, expansion, churn, downgrades) — Starting ARR is the opening balance only.
• Restatement corrections — never edit the opening balance to fix a prior error; land corrections as an explicit restatement line.

Required inputs

• Prior period's closing ARR.

Data-source priority

• Prior period's board-reported closing ARR (the audited / agreed number).

Edge cases

• First period a company tracks ARR: Starting ARR is whatever the historical ARR was at that open; if unknown, disclose as "first tracked period — opening balance estimated."
• Restatement of a prior period: Starting ARR for the current period uses the RESTATED prior close, with the restatement disclosed. Do not silently absorb it.
• Acquisition that closed exactly at period open: decide whether acquired ARR is in the opening balance or appears as an in-period inorganic line, and disclose.

Validation checks

• Starting ARR === prior period closing ARR. Any inequality is a restatement or a data error — never let it pass silently.
• Starting ARR + New Business + Expansion − Downgrades − Churn === Ending ARR. The waterfall must reconcile to the penny.

Common miscomputations

• Restating Starting ARR mid-stream to "fix" a prior reporting error — breaks the period-over-period audit trail; corrections belong in a restatement note.
• Using current-period ARR as the starting balance (off-by-one-period error) — the whole waterfall then fails to reconcile.
• Letting Starting ARR drift from prior closing ARR because the two are computed by different teams from different snapshots.
• Folding acquired ARR into Starting ARR without disclosure — masks how much of "growth" was inorganic.

Related KPIs

• sales.arr
• sales.new_business
• sales.expansion
• sales.churn_arr
• sales.downgrades

Source

I'mBoard editorial — authored and maintained by I'mBoard, first published 2026-04-01. No third-party standard is cited for this KPI; when one emerges, the definition is back-attributed and promoted to the published tier (a minor version bump). Read the ontology methodology for the published vs editorial tier system, attribution rules, and dispute process.

Stage relevance

Suggested for stages: Pre-Seed, Seed, Series A, Series B, Series C+, Public.

Default owning functions

• Finance
• Sales

Machine-readable

• This KPI as JSON: /api/ontology/sales/starting_arr.json
• All Sales KPIs: /api/ontology/sales.json
• Full catalog: /api/ontology/index.json