Basis of Differences INDIAN GAAP US GAA

Financial statements Under Indian GAAP, Financial statements are prepared as per the principle Under U
Cash flow statements of conservatism. It means that the company entity should follow “Anticipate Entities
no profits and provide for all possible losses.” Items on
Further, financial statements format should be according to the Schedule VI liquidity
to the Companies Act, 1956 and other regulatory authorities such as US GAA
insurance, electricity, and banking. the cash
Under Indian GAAP, preparation of cash flow statements is mandatory for precedin
the companies whose shares are listed on recognized stock exchanges and
Certain enterprises whose turnover for the accounting period exceeds Rs. 50
crore.

Consolidation of According to the Indian GAAP, the Consolidation of Accounts of As per th

subsidiary subsidiary companies is not mandatory. However, if an enterprise presents mandato
companies their consolidated financial statements, they have to comply with AS 21. provides
business

Depreciation Depreciation is allocated to a systematic basis for each accounting period Allocate
over the useful life of the assets. of the as
However, if the useful life is shorter as per the Companies act, the
depreciation is calculated by applying higher rates.

Intangible assets The treatment of intangible assets shall be: The trea
Capitalization: If recognition criteria are met Capitaliz
Amortization: All intangibles are amortized over the useful life within a Amortiz
rebuttable presumption of not exceeding 10 years. Intangib
Revaluations: Revaluations are not allowed. at least a
Revalua

Property, Plant and Historical cost is used Historica

Equipment Revaluations are allowed. Further, an entire class of assets is revalued, or Revalua
the selection of assets is made systematically.

Valuation of Under Indian GAAP, It requires current investments to be carried at the US GAA
Investments lower of cost and fair value and long-term investments at cost. marked t
Further, the aggregate market values of quoted long-term investments are
required only to be disclosed, not adjusted.

Correction of Prior Restatement is not required, i.e., the effect of correction is included in the Restatem
period items current year income statement with separate disclosure. balances
presente

Foreign currency As per AS 11, it requires the capitalization of exchange differences arising US GAA
transaction on repayment of liabilities incurred to acquire fixed assets. It is mandatory capitaliz
differences ever after the asset is put to use.

Employee benefits Under Indian GAAP, provision for leave encashment is accounted on the Under U
basis of basis.
Actuarial valuation. The com
The compensation paid to the employees who opt for the voluntary retireme
retirement scheme, can be amortized over 60 months. accept th