The document discusses key aspects of Generally Accepted Accounting Principles (GAAP) including definitions, similarities and differences between Indian GAAP, International Financial Reporting Standards (IFRS) and US GAAP. It covers topics such as financial statements, revenue recognition, foreign currency translation and more. GAAP provides common standards for preparing financial statements to ensure consistency and comparability. While there are some differences between jurisdictions, the overall goals and many principles are largely similar across frameworks.

1. GAAP Presented By : Devesh Narayan Ishansh Vij Koushik Sarkar Kushal Sardana Rudranil Roysharma Ramakrishna G. Under the kind guidance of - Prof. Vinay K. Nangia

8. Similarities & Differences between Indian GAAP, US GAAP & IFRS

9. Financial Statements

12. Components of Financial Statements Required Required Required Notes to the Financial Statements Required Required Required Accounting Policy Required Required Required Fund flow Statement Required Required Required Statement of changes in shareholder’s equity Required Required Required Income Statements Required Required Required Balance Sheet IFRS US GAAP Indian GAAP Components

23. Revenue Recognition

26. Criteria for Revenue Recognition CONDITION Can the revenue be recognized TIMING When will we record revenues? MEASUREMENT How much will we record? CRITERIA FOR REVENUE RECOGNITION

27. Criteria for Revenue Recognition : Goods Property in goods transferred to buyer for a price Or All significant risks and rewards of ownership transferred to buyer & seller retains no effective control over goods No significant uncertainty regarding consideration PERFORMANCE UNCERTAINTY

28. Criteria for Revenue Recognition : Services RECOGNITION OF REVENUE INCOME COMPLETED SERVICE METHOD PROPORTIONATE SERVICE METHOD Recognize revenue when the sole or final act takes place and the service becomes chargeable Recognize revenue by reference to performance of each act – on the basis of contract value / associate cost / no. of acts No Uncertainty

34. Alternate Standards: A Comparison Vendor’s price fixed or determinable Stage of completion of transaction can be measured Delivery has occurred or services have been rendered Seller retains neither management nor control , and transfer of risks and rewards of ownership to buyer Vendor’s price is fixed or determinable Revenue and costs (including future costs) can be measured reliably Collectibity is reasonably assured Probable that economic benefit will flow to entity US GAAP Indian GAAP / IFRS

39. Foreign Currency Translation

42. - Non-monetary items denominated in a foreign currency and carried at fair value are reported using the exchange rate that existed when the fair value was determined - Income statement accounts are translated using historical rates of exchange at the date of transaction or an average rate as a practical alternative, provided the exchange rate does not fluctuate significantly. - Exchange gains and losses arising from an entity’s own foreign currency transaction are reported as part of the profit or loss for the year. TRANSLATION – The Individual Entity contd..

43. TRANSLATION – Consolidated Financial Statements When translating financial statements into a different presentation currency IFRS, US GAAP and INDIAN GAAP require the assets and liabilities to be translated using the closing rate . Amounts in the income statements are translated using the average rate for the accounting period if the exchange rates do not fluctuate significantly . IFRS and INDIAN GAAP are silent on the translation of equity accounts historical rates are used under US GAAP.

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