A Simple Guide to US GAAP vs. IFRS vs. Indian Accounting Standards
Are accounting standards really that different from one country to another?
The answer is: Yes and No.
If you’re running a business that deals internationally.Say, a startup in the US working with Indian freelancers, or a UK eCommerce company outsourcing bookkeeping to India,you need to understand how accounting rules vary across regions.
In this blog post, we’ll walk you through the three most widely used accounting frameworks:
- US GAAP (Generally Accepted Accounting Principles)
- IFRS (International Financial Reporting Standards)
- Ind AS (Indian Accounting Standards)
Let’s break it down in simple English, so you can understand what works best for your business without needing a CPA license.
What is US GAAP?
US GAAP is the accounting rulebook used in the United States. It’s governed by the Financial Accounting Standards Board (FASB) and is considered very detailed, rigid, and rules-based.
Key Features:
- Standardized for public companies in the US
- Follows a rules-based approach
- Used by companies listed on US stock exchanges
- Focuses heavily on compliance and consistency
Who Uses It?
US-based corporations
Businesses planning to list in the US
Companies working with US investors or regulators
If you’re an international company with US operations or clients, understanding GAAP is essential for tax filing, reporting, and investor relations.
What is IFRS?
IFRS, developed by the International Accounting Standards Board (IASB), is followed in over 140 countries, including the UK, EU, UAE, Australia, and more.
Unlike GAAP, IFRS is principles-based.It provides a framework but allows for more interpretation based on the situation.
Key Features:
- Globally accepted standard
- More flexible and open to judgment
- Suitable for cross-border reporting
- Focuses on the substance of transactions over strict rules
Who Uses It?
Businesses with global clients or subsidiaries
Companies operating in the UK, UAE, Europe, or Australia
Firms preparing for international funding or expansion
At BookkeepingWithSahed.in, we help many UAE and UK-based clients maintain IFRS-compliant records using tools like Xero and Zoho Books.
What is Indian Accounting Standards (Ind AS)?
India used to follow Indian GAAP, but now, larger companies are required to use Ind AS, which is largely converged with IFRS,but not identical.
Ind AS is issued by the Ministry of Corporate Affairs (MCA) and overseen by ICAI (Institute of Chartered Accountants of India).
Key Features:
- Based on IFRS, but with certain carve-outs for Indian context
- Required for listed and large private companies in India
- Smaller companies still use Accounting Standards (AS)
Who Uses It?
Indian private and public companies
Startups preparing for funding or IPO
Indian subsidiaries of foreign companies
We help international clients harmonize their books with Ind AS when they’re working with Indian partners, vendors, or teams.
US GAAP vs IFRS vs Ind AS – Quick Comparison Table
| Feature | US GAAP | IFRS | Ind AS |
|---|---|---|---|
| Approach | Rules-based | Principles-based | Principles-based (IFRS-aligned) |
| Country of Origin | United States | International (IASB, UK) | India |
| Global Adoption | US only | 140+ countries | India only |
| Inventory Valuation (LIFO) | Allowed | Not allowed | Not allowed |
| Development Costs | Expensed | Capitalized | Capitalized (with conditions) |
| Flexibility | Low | High | Medium |
| Preferred for | Compliance-heavy US firms | Global expansion & cross-border work | Indian companies complying with MCA |
Which One Should You Follow?
Here’s a simple rule of thumb:
- Use US GAAP if you’re operating in or doing business with the USA
- Use IFRS if you’re based in the UK, UAE, or doing cross-border work
- Use Ind AS if your business is registered in India and crosses certain thresholds
Pro tip: If you’re a small global business, IFRS gives you the most flexibility, and most cloud-based software platforms (like Xero, QuickBooks Online, and Zoho Books) support IFRS-ready reports.
Why It Matters for International Bookkeeping Clients
If you’re an international client working with a virtual bookkeeper in India, it’s crucial they understand these standards and adapt to your country’s requirements.
At BookkeepingWithSahed.in, we:
- Use GAAP for US clients using QuickBooks
- Apply IFRS principles for UAE and UK clients using Zoho/Xero
- Offer Ind AS-compliant support for Indian firms
This helps ensure clean, audit-ready financials, no matter where you’re located.
The Risk of Ignoring the Right Accounting Standards
Using the wrong standard can lead to:
- Confusing reports that don’t match investor expectations
- Rejected loan or funding applications
- Tax miscalculations or compliance penalties
- Mismatched consolidation if you have a multi-country business
That’s why you need a partner who understands local and global compliance.
Final Thoughts: Don’t Let Standards Confuse You
You don’t need to become an accounting expert to understand these standards.
You just need the right expert by your side.
With 18+ years of experience in both Indian and international bookkeeping, we help you stay compliant, confident, and financially in control,wherever your business operates.
Need help aligning your books to GAAP, IFRS or Ind AS?
👉 Schedule a free consultation
Have questions about these accounting standards?
Drop them in the comments or send us a message.We’re here to simplify your bookkeeping journey.
