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    Overview of Indian and Us Gaap

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    This document provides an overview of Generally Accepted Accounting Principles (GAAP) in India and the US, and introduces International Financial Reporting Standards (IFRS). It discusses the key concepts of GAAP including conservatism, materiality, objectivity, and matching. It then defines IFRS as the global standards set by the International Accounting Standards Board to make financial statements consistent, transparent and comparable worldwide. Finally, it outlines the need for IFRS, including facilitating global investment, economic efficiency through improved capital allocation, and reducing costs for businesses through a single reporting language.

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    Overview of Indian and Us Gaap

    Uploaded by

    Mayank pal
    63 views7 pages
    This document provides an overview of Generally Accepted Accounting Principles (GAAP) in India and the US, and introduces International Financial Reporting Standards (IFRS). It discusses the key concepts of GAAP including conservatism, materiality, objectivity, and matching. It then defines IFRS as the global standards set by the International Accounting Standards Board to make financial statements consistent, transparent and comparable worldwide. Finally, it outlines the need for IFRS, including facilitating global investment, economic efficiency through improved capital allocation, and reducing costs for businesses through a single reporting language.

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    This document provides an overview of Generally Accepted Accounting Principles (GAAP) in India and the US, and introduces International Financial Reporting Standards (IFRS). It discusses the key concepts of GAAP including conservatism, materiality, objectivity, and matching. It then defines IFRS as the global standards set by the International Accounting Standards Board to make financial statements consistent, transparent and comparable worldwide. Finally, it outlines the need for IFRS, including facilitating global investment, economic efficiency through improved capital allocation, and reducing costs for businesses through a single reporting language.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    63 views7 pages

    Overview of Indian and Us Gaap

    Uploaded by

    Mayank pal
    This document provides an overview of Generally Accepted Accounting Principles (GAAP) in India and the US, and introduces International Financial Reporting Standards (IFRS). It discusses the key concepts of GAAP including conservatism, materiality, objectivity, and matching. It then defines IFRS as the global standards set by the International Accounting Standards Board to make financial statements consistent, transparent and comparable worldwide. Finally, it outlines the need for IFRS, including facilitating global investment, economic efficiency through improved capital allocation, and reducing costs for businesses through a single reporting language.

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    [DOCUMENT TITLE]

    OVERVIEW OF INDIAN AND US GAAP, INTRODUCTION TO IFRS

    SAHIL KAPOOR
    SECTION B
    BBA GENERAL
    OVERVIEW OF INDIAN AND US GAAP
    Generally Accepted Accounting Principles: It
    refers to the rules or guidelines adopted for
    recording and reporting of business
    transactions in order to bring uniformity in the
    preparation and presentation of financial
    statements.
    These principles are also referred to as concept
    and conventions.
    Four basic constraints of GAAP include
    prudence, materiality, objectivity, matching
    concept and full disclosure.
    1.CONSERVATISM CONCEPT:
     The concept of Conservatism is also called as Prudence
    Concept.
     Do not overestimate the amount of revenues recognized or
    underestimate the amount of expenses.
     One should be conservative in recording the amount of assets
    and not underestimate liabilities.
     The result should be conservatively stated financial statement.

    2.MATERIALITY CONCEPT:
    The Materiality Concept states that an Accounting Standards can be
    ignored if the net impact of doing so has such a small impact on
    financial statement that a reader of the financial statement would not
    be misled.
    Under GAAP you do not have to implement the provision of an
    accounting standards if an item is immaterial.

    3.OBJECTIVITY CONCEPT:
    The objectivity concept states that accounting information and
    financial reporting should be independent and supported with
    unbiased evidence.
    This means that accounting information must be based on research
    and facts not merely a preparer opinion.
    The objectivity concept is aimed at making financial statement more
    relevant and reliable.
    This means that financial statement is accurate and can be used to
    predict the future company performance.
    4.MATCHING CONCEPT:
    Matching concept is the accounting principle that requires that the
    expenses incurred during a period be recorded in the same period in
    which the related revenues are earned.
    The matching concept is based on Cause and Effect relationship.

    5. Full disclosure concept:


    It is a concept that requires a business to report all necessary
    information about their financial statements and other relevant
    information to any persons who are accustomed to reading this
    information. To ensure proper disclosure of material accounting
    information, the Indian Companies Act 1956 has provided a format
    for preparation of profit and loss account and balance sheet of a
    company which needs to be compulsorily adhered to, for preparation
    of these statements.
    INTRODUCTION TO IFRS
     IFRS stands for International Financial Reporting Standards
     IFRS are issued by the International Accounting Standard
    Board.
     IFRS are set of accounting rules for the financial statement of
    public companies that are intended to make them consistent,
    transparent and easily comparable around the world.
     IFRS fosters greater corporate transparency.

    NEED OF IFRS

    1. The important economic decisions are made on basis of


    financial statements. In order to avoid manipulations of
    figures in the financial accounts.
    2. IFRS helps in global harmonization. Unless accounting
    activities are regulated, different countries will apply
    different set of accounting rules and regulations are
    prevalent in each country. This will restrict uniformity and
    comparability of financial statement.
    3. It facilitates global investment. The convergence of
    financial reporting and accounting standards is a valuable
    process that contributes to the free flow of global
    investments and achieve substantial benefits for all capital
    market stakeholders.
    4. IFRS contribute to economic efficiency by helping
    investors to identify opportunities and risk across the world
    thus improving the capital allocation. For businesses the
    use of a single trusted accounting language lowers the cost
    of capital and reduces the international reporting cost.
    THANK YOU.

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