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Indian Gaap vs IFRS

>> February 7, 2012

1. Presentation of financial statements

Indian GAAP

a) Classification of an item as extraordinary.
b) Format of Financial statement under True and fair view under act.


a) True and fair view override.
b) Format not prescribed, only components of F.S determined.
c) Various schedules now be given in the form of notes.
d) comparatives to be given for both numerical and non numerical information.

2. Inventories

Indian Gaap

a) AS 2 applicability/non applicability held by commodity brokers/service providers


a) This standard is not applicable to inventories by commodity brokers.
b) Measures of such inventories at Future value - cost of sell.
c) Measurement principles for service provider inventory
d) Measurement principles for inventories acquired on deferred settlements terms.

3. Statement of cash flow

Indian GAAP

a) Cash flows from extraordinary activities
b) Bank overdrafts as financing activities
c) Dividend paid is always classified as finance activity


a) Bank overdrafts as cash equivalents
b) There is no guidance for classifying cash flows arising due to Dividend & Interest. They may be classified as Operating, Financial or Investing activities.

4. Accounting Policies, Changes in Accounting Estimates and Errors

Indian GAAP

a) Treatment of retrospective application of change in accounting policy.
b) Inclusion of prior period items in determination of current year profit.


a) Comparatives need to be restated for a) and b) of above.
b) Impending changes disclosures

5. Income Tax

Indian GAAP

a) Timing differences or income based approach


a) Temporary differences or tax base assets and liabilities approach

6. Property, plant and equipment

Indian GAAP

a) Using revaluation for recouping depreciation
b) change in method of depreciation as change in accounting policy
c) Depreciation rates under schedule XIV


a) Revaluation reserves can not be used for recouping depreciation.
b) Change in method of depreciation is change of accounting estimate.
c) Depreciation rates based on useful life.
d) Component accounting

7. Revenue

Indian GAAP

a) Service revenue to be recognised either on % of completion method or completed contract method


a) Measuring revenue at fair value along with discounting
b) REPO arrangements accounting
c) Service revenue to be recognized only on % of completion method
d) Barter transactions

8. Government Grants

Indian GAAP

a) Refund of govt. grand as being extraordinary
b) Recognizing cumulative additional depreciation on refund of grant over remaining useful life of asset


a) Refund of Govt. Grant as being ordinary
b) Recognizing cumulative additional depreciation on refund of grant as an expense

9. Effect of changes in foreign exchange rates

Indian GAAP

a) The two dimensional concept of foreign currency and presentation currency


a) The three dimensional concept of functional currency, foreign currency and presentation currency.

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