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Short answer
US GAAP and Ind AS are close on revenue recognition but differ on leases (two lessee models vs one), credit losses (lifetime expected losses from day one vs a staged model), goodwill (private-company amortisation option vs impairment only) and related-party disclosures. An Indian subsidiary of a US company usually keeps Ind AS or IGAAP books for India and a mapped set of adjustments for the parent's US GAAP consolidation.
Differences at a glance
| Area | US GAAP | Ind AS |
|---|---|---|
| Revenue | ASC 606 | Ind AS 115 — largely converged; differences in some licensing, contract-cost and practical-expedient details |
| Leases (lessee) | ASC 842 — operating and finance leases | Ind AS 116 — single on-balance-sheet model; low-value exemption available |
| Credit losses | CECL — lifetime expected losses recognised from day one | Ind AS 109 — 12-month or lifetime losses depending on credit deterioration; simplified approach for trade receivables |
| Goodwill | Impairment testing; private companies may elect amortisation | No amortisation; annual impairment test |
| Related parties | ASC 850 | Ind AS 24 — different definitions and disclosure detail, including key management personnel compensation |
Why the differences matter
The same transaction can produce different profit in India and in the parent's consolidated accounts. That affects management bonuses, intercompany pricing reviews and how the parent reads the subsidiary's performance. Tracking adjustments every month — instead of only at year end — keeps the two sets of numbers explainable.
How to manage dual reporting
- Keep the primary books under the Indian framework required by law.
- Maintain a mapping of the Indian chart of accounts to the parent's US GAAP reporting package.
- Book recurring GAAP adjustments — leases, credit losses, stock compensation — in a separate adjustment layer each month.
- Reconcile Indian and US GAAP profit and equity at each reporting date, with a short explanation for each item.
Common questions
Does an Indian subsidiary of a US company have to follow Ind AS?
Only if it meets the Ind AS applicability criteria — broadly, listed companies, companies above the net-worth thresholds, and subsidiaries or holding companies of such companies. Others prepare statutory accounts under Indian GAAP (IGAAP). Either way, the US parent usually needs US GAAP figures for consolidation.
What is the biggest difference between US GAAP and Ind AS for leases?
US GAAP (ASC 842) keeps two lessee categories — operating and finance leases — with different expense patterns, while Ind AS 116 uses a single lessee model in which all recognised leases are treated like finance leases. Ind AS also allows a low-value asset exemption that US GAAP does not.
Can goodwill be amortised under Ind AS?
No. Ind AS does not permit goodwill amortisation; goodwill is tested for impairment at least annually. US GAAP lets private companies elect to amortise goodwill, generally over up to ten years, so the two can report different profits.
Reporting to a US parent?
TENVY prepares Indian statutory accounts and the US GAAP reporting package for group consolidation, so your group finance team gets one clean set of numbers.
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This guide is a general summary, not accounting advice. Standards are amended from time to time; apply the current text of the relevant standard to your facts.