Compare IFRS and Indian GAAP.

The major differences between International Financial Reporting Standards (IFRS) and Indian Generally Accepted Accounting Principles (GAAP) are as follows −

  • The full form of IFRS is International Financial Reporting Standards.

  • Developed by International Accounting Standards Board (IASB).

  • A company has to disclose a note that its financial statements comply with IFRS.

  • Adopted by more than 110+ countries.

  • IFRS 1 provide clear instructions about how to adopt IFRS for first time.

  • No exemption for cash flow statements.

  • IAS 16 mandates component accounting.

  • It has comprehensive guidance for balance sheets, an entity to present assets and liabilities and classify them as current or non-current items.

  • The full form of GAAP Generally Accepted Accounting Principles.

  • Developed by Ministry of Corporate Affairs (MCA).

  • If a company is following Indian GAAP, it is presumed that its comply with it and shows a fair and fair view about its financial affairs.

  • Adopted by only Indian companies.

  • Doesn’t give any clear instructions on first time adoption.

  • Exemption for SMEs cash flow statements.

  • AS 10 recommends does not force component accounting.

  • No particular format for balance sheet.

  • Components of financial statements.

Components of financial statements

  • Statement of financial position.

  • Statement of profit or loss and other comprehensive income.

  • Statements of changes in equity for the period.

  • Statement of cash flow for the period.

  • Balance sheet.

  • Profit and loss account/statement of profit and loss.

  • Cash flow accounts (not for SMEs).

  • Statement of changes in equity, notes to accounts/financial statements.

  • Disclosure of significant accounting policies.