India-US Accounting Bridge: Top 10 Differences

Bridging Two Worlds

For companies operating across India and the US, understanding the practical differences between Ind AS and US GAAP is critical. While both frameworks are rooted in similar conceptual foundations, the devil is in the details.

Top 10 Differences

• Revenue Recognition: Ind AS 115 is substantially converged with ASC 606, but Indian regulatory overlays (GST treatment, export incentives) create practical differences in application.

• Financial Instruments: Ind AS 109 follows IFRS 9 with certain carve-outs. US GAAP (ASC 326 CECL) has a fundamentally different expected credit loss model.

• Leases: Ind AS 116 distinguishes between finance and operating leases for lessees. ASC 842 similarly recognizes both but has different measurement nuances.

• Business Combinations: Ind AS 103 and ASC 805 are broadly aligned, but Ind AS includes specific provisions for common control transactions not present in US GAAP.

• Intangible Assets: Ind AS 38 allows revaluation of intangibles to fair value. US GAAP generally does not permit upward revaluation of intangible assets.

• Government Grants: Ind AS 20 provides specific guidance on government grants. US GAAP lacks comprehensive government grant guidance (IAS 20 analogy is common but not authoritative).

• Related-Party Disclosures: Ind AS 24 and ASC 850 have different scope definitions for related parties, particularly around government-related entities.

• Segment Reporting: Ind AS 108 and ASC 280 are conceptually identical, but the new ASC 280 amendments (effective 2024) add significant expense disaggregation requirements.

• Earnings Per Share: Ind AS 33 and ASC 260 are broadly converged but differ in treatment of certain dilutive instruments common in Indian capital markets.

• Presentation Currency: Ind AS requires functional currency assessment similar to US GAAP but Indian regulatory requirements around forex reporting add complexity.

Practical Advice: Cross-border companies should maintain a living reconciliation document that maps every significant difference and its financial impact. This becomes invaluable during audits and regulatory filings in both jurisdictions.