If classical quasigeostrophic (QG) flow breaks down at smaller scales, it gives rise to questions of whether higher-order nonlinear balance can be maintained, to what scale and for how long. These are naturally followed by asking how this is affected by stratification and rotation. To address these questions, we perform non-hydrostatic Boussinesq simulations where the initial data is balanced using the Baer–Tribbia nonlinear normal mode initialization scheme (NNMI), which is accurate to second order in the Rossby number, as the next-order improvement to first-order QG theory. The NNMI procedure yields an ageostrophic contribution to the energy spectrum that has a very steep slope. However, as time passes, a shallow range emerges in the ageostrophic spectrum when the Rossby number is large enough for a given Reynolds number. It is argued that this shallow range is the unbalanced part of the motion that develops spontaneously in time and eventually dominates the energy at small scales. If the initial flow is not nonlinearly balanced, the shallow range emerges at even lower Rossby number and it appears at larger scales. Through numerous simulations at different rotation and stratification, this study gives a clear picture of how energy is cascaded in different initially balanced regimes of rotating stratified flow. We find that at low Rossby number the flow mainly consists of a geostrophic part and a balanced ageostrophic part with a steep spectrum. As the Rossby number increases, the unbalanced part of the ageostrophic energy increases at a rate faster than the balanced part. Hence, the total energy spectrum displays a shallow range above a transition wavenumber. This wavenumber evolves to smaller values as rotation weakens.