What is US GAAP?
Chartered accountants’ bodies lay out accounting principles to be followed in a country, while preparing any statement of accounts. In India, accounting standards are prepared by the Institute of Chartered Accountants of India. The ones set down by the US Federal Accounting Standards Bureau are used by US firms, and are recognised as one of the most stringent. Accounting standards take into account a country’s tax laws and company laws. Since these laws differ widely from country to country, accounting standards also vary in their treatment of expenses and income. Accounts prepared according to standards followed in various countries can result in widely different accounting statements. How it’s different. There are about 250 major and minor differences between the two accounting standards. Important among these are the treatment of deferred taxes, depreciation and in accounting for investments. Fundamentally though, the standards differ on two counts. One, under US GAAP, the notion of
