Are Indian Accounting Standards better than IFRS?

I don’t exactly think so. But before we go into that further, let’s note one thing. Generally Accepted Reporting Principles of India are standards designed to suit the specific needs and challenges of businesses in India. So, at times, it would be quite unjust to compare it with IRFS.

That being said, sooner or later, India will take up International Financial Reporting Standards to level up with international market and to stay competitive on the global scene.

Now coming to comparing both of these, I think one of the biggest drawbacks of Indian GAAP is that its leading authority is Ministry of Corporate Affair – a part of government, which can be easily influenced with political motives. On the other hand, the leading authority of IFRS is International Accounting Standards Board (IASB), a complete separate entity that is comparatively less influenced by political motives. So you can expect much less corruption, inflexibility, and partiality in IFRS than GAAP.

Other than that, I think Indian GAAP is much more robust and favorable to small and medium-scale businesses. Be it in cash flow statements, historical cost, depreciation—you will find GAAP much more robust and friendly.

So yeah, in certain departments, GAAP take the large piece of cake. In others, it is IFRS who wins hands down.