Understanding U.S. GAAP in the Context of Indian Companies Financial Reporting Practices

Abstract

In the context of globalization of the Indian economy, the domestic companies have started increasingly interacting with global fund managers, investors as well as investment institutions especially in the US. The US investors have become interested in the financial performance of the Indian companies and its reporting. Indian financial statements are different from US financial Statement in structure, form and content. Indian accounting standards also vary in terms of breadth and coverage. Can Indian companies fulfill the expectations of US investors and fill the gap of information asymmetry? This article presents a framework of how Indian companies aspiring to tap the US capital market has geared themselves up to the requirements of the US GAAP of financial reporting and disclosure standards.