Comparison between Indian GAAP and US GAAP

Indian GAAP US GAAP

Under Indian GAAP, Financial

statements are prepared in
Under US GAAP conservatism is not
1.Underlying accordance with the principle of
considered, if it leads to deliberate and
assumptions: conservatism which basically
consistent understatements
means “Anticipate no profits and
provide for all possible losses”.
Financial statements prepared as per
Under Indian GAAP, financial US GAAP are not required to be
2.Presentation of statements are prepared in prepared under any specific format as
financial accordance with the presentation long as they comply with the
statements requirements of Schedule VI to disclosure requirements of US  SEC
the Companies Act, 1956. (Securities and Exchange Commission)
and US GAAP.
Mandatory only for listed
3. Cash flow companies and companies
Mandatory for all entities.
Statement meeting certain turnover
conditions.
Under US GAAP, Goodwill and
intangible assets that have indefinite
Under the Indian GAAP
useful lives are not  amortized ,but they
goodwill is capitalized and
4. Goodwill: are  tested at least annually for
charged to earnings over 5 to 10
impairment using a process that begins
years period.
with an estimation of the fair value of a
reporting unit.
Under Indian GAAP , there is no
such requirement and hence the Under US GAAP , the current portion
5. Long term
interest accrued on such long of long term debt is classified as
Debts:
term debt in not taken as current current liability
liability
Under Indian GAAP, provision
Under US GAAP, provision for leave
for leave encashment is
encashment is accounted on actual
accounted based n actuarial
6.Employee basis. Compensation towards
valuation. Compensation to
benefits: voluntary retirement scheme is to be
employees who opt for voluntary
charged in the year in which the
retirement scheme can be
employees accept the offer.
amortized over 60 months. 
Under the Indian GAAP,
US GAAP , depreciation has to be
depreciation is provided based
7.Depreciation: provided over the estimated useful life
on rates prescribed by the
of the asset,
Companies Act, 1956.