Ind AS is converged with IFRS, with some carve-outs. US GAAP is a separate rule-based framework from the FASB. They often give similar answers, but in several areas the treatment differs. For an Indian firm converting accounts for a US parent, the useful work is knowing which areas to check, not memorising both frameworks.
Last reviewed: 17 October 2026. Facts checked. A general search did not return a primary comparison from the FASB, ICAI or MCA, and we did not open the text of any Ind AS or ASC Topic. The areas listed below are widely recognised differences between IFRS-based frameworks and US GAAP, but the Ind AS carve-outs and the current US-GAAP wording must be confirmed from the standards. No figures are quoted. Treat this as a map of where to look, and verify each area before using it on an engagement.
Where each framework comes from
- Ind AS: issued by the Ministry of Corporate Affairs on the recommendation of ICAI, based on IFRS with certain modifications. It applies to companies based on net-worth and listing criteria in the Ind AS rules.
- US GAAP: the Accounting Standards Codification, maintained by the FASB. Large and detailed, with industry-specific guidance.
IFRS is generally described as more principles-based and US GAAP as more rules-based. In practice, that difference shows up as extra bright-line tests and industry guidance in US GAAP.
Areas that commonly differ
Check each of these when converting. The right-hand notes describe what to look at, not a conclusion.
| Area | What to look at |
|---|---|
| Inventory | Whether the framework allows reversal of write-downs, and the cost formulas permitted (LIFO is not permitted under IFRS-based frameworks but is under US GAAP) |
| Leases | Both frameworks bring most leases onto the balance sheet, but lessee income statement presentation can differ for operating-type leases |
| Development costs | IFRS-based standards allow capitalisation once criteria are met; US GAAP generally expenses R&D, with exceptions such as certain software costs |
| Impairment of assets | Method and the ability to reverse impairment losses differ |
| Goodwill | Test level and process differ; both frameworks prohibit amortisation for most entities, but private-company alternatives may exist in the US |
| Revenue | Ind AS 115 and ASC 606 are closely aligned, but some industry guidance and detailed requirements differ |
| Financial instruments | Classification, impairment models and hedge accounting differ in detail |
| Presentation | Extraordinary items, classification of certain items and format requirements |
| Consolidation | Control models and treatment of variable interest entities |
| Provisions | Thresholds for recognition and the measurement approach |
| Share-based payments | Measurement dates and treatment of graded vesting |
| Deferred tax | Classification and recognition approaches |
For the older Indian standards compared with Ind AS, see our guide to Ind AS vs Indian GAAP differences. If the books are on Ind AS, the starting point to US GAAP is shorter than from older Indian GAAP.
Why Ind AS is not the same as IFRS
Ind AS includes carve-outs from IFRS, such as in certain areas of financial instruments, business combinations under common control, and some presentation items. This matters because a firm that believes "Ind AS equals IFRS, so US-GAAP conversion is the standard IFRS-to-US-GAAP exercise" may miss the carve-out adjustments. Check the specific Ind AS text for each area, not just a summary.
A working method for a conversion
- Scope the areas. Take the balance sheet and income statement, and list the captions where the entity has balances or transactions.
- Rank by materiality and difference. A small area with a known difference may not need an adjustment; a large area with a likely difference does.
- Identify the policy under each framework. Write one sentence for each, cited to the standard.
- Compute the adjustment. Show opening balance effect, current year effect and closing effect.
- Reconcile. Local-GAAP profit and equity to US-GAAP profit and equity, adjustment by adjustment.
- Disclose. US-GAAP disclosures are often more extensive; a disclosure checklist avoids gaps.
- Review. A reviewer with US-GAAP experience signs off.
Judgement areas to flag
- Estimates. Where US GAAP and Ind AS require different measurement models, the same business facts may produce different numbers. Document the assumptions.
- Transition. If conversion is a first-time exercise, opening-balance adjustments can be large. Keep the working papers for each.
- Consistency. Once a US-GAAP policy is chosen for a group, apply it consistently across periods and entities.
Audit angle
If you are auditing, not converting, check who owns the US-GAAP numbers. A local statutory audit report is on Ind AS financial statements. Any US-GAAP package is typically prepared for the parent and is reviewed or audited under the group auditor's instructions. Our post on using the work of another auditor under SA 600 is a useful base for the Indian side.
What this post does not do
It does not give a line-by-line technical comparison, and it does not state current effective dates or thresholds. Both frameworks change, and the right source is the standard itself. A reasonable habit is to keep a one-page policy comparison for each client and update it when either framework changes.
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