The three frameworks at a glance
Each accounting framework was built for a different primary audience, answers to a different regulator, and will produce contrasting financial numbers from the exact same underlying business transactions.
French GAAP — PCG
Set by Plan Comptable GénéralSet by French statutory law. Built strictly to satisfy local tax authorities and protect creditors. The mandatory baseline framework for all French legal entities.
IFRS
Set by IASBInternational Financial Reporting Standards. Built for public investors and global capital markets. Mandatory for listed groups across the EU and in over 140 countries.
US GAAP
Set by FASBGenerally Accepted Accounting Principles. Built primarily for US investors, lenders, and regulators. Legally required for SEC-registered companies and expected by US institutional VC and PE funds.
Who uses which framework — and when
In cross-border business, your reporting framework is not triggered by where your headquarters sits. It is determined by who is reading your financial statements and why.
- Private French entity. Legally mandated to file statutory accounts using the PCG. No exceptions.
- Listed European group. Legally mandated to present consolidated accounts under IFRS. Individual subsidiary books remain in local GAAP (e.g., PCG).
- US entity or US parent. Financial reporting in US GAAP to meet the expectations of board members, local banks, and US investors.
A fast-growing French scale-up with an active US subsidiary will typically run local PCG books in France for tax filings, US GAAP reporting for its American entity and US investors, and — upon reaching a late-stage or public listing milestone — IFRS for its consolidated global group accounts. Three separate frameworks operating inside one company.
Where the numbers differ: a direct comparison
These are the five topics that produce the most significant differences in practice. Every CFO moving between any two of these frameworks will encounter them.
Revenue recognition
Linked to the legal delivery of goods or services. Transaction-based.
IFRS 15 — principles-based five-step model anchored on the transfer of control.
ASC 606 — same five-step model, with minor differences in licensing and variable consideration.
Lease accounting
Most leases treated as operating expenses, off the balance sheet.
IFRS 16 — all leases over 12 months on the balance sheet as a right-of-use asset and lease liability.
ASC 842 — same on-balance-sheet approach, with operating and finance leases classified separately.
Provisions
Conservative prudence — probable future costs booked early.
IAS 37 — recognized when an outflow is more likely than not (>50%).
ASC 450 — "probable" interpreted as a meaningfully higher bar than IFRS.
Asset depreciation
Local tax law dictates schedules. Amortissement dégressif is common.
Decoupled from tax. Reflects actual useful economic life.
Useful economic life drives depreciation. MACRS tracked separately.
Inventory valuation
LIFO is not permitted. FIFO or weighted average cost required.
LIFO is not permitted. FIFO or weighted average cost required.
LIFO is permitted and widely used for US tax advantages.
Navigating your cross-border scenario
Scenario 1 — French company opening a US subsidiary
Your French parent stays on PCG. Your US branch requires US GAAP for local board visibility and banking relationships. The structural gap between PCG and US GAAP is the widest of any two-framework combination — requiring a rigorous, systematic conversion schedule (matrice de passage) from day one.
Scenario 2 — US company expanding into France
Your newly formed French subsidiary is legally required to maintain its statutory ledger using the PCG. Your US headquarters consolidates global financials under US GAAP. Same conversion architecture, in reverse.
Scenario 3 — Scale-up already consolidated under IFRS
Because IFRS and US GAAP share an investor-first philosophy and have converged on major standards, your transition involves targeted technical adjustments — LIFO inventory treatment, lease presentation, provision thresholds — rather than a complete accounting rewrite.
The practical implications for your finance team
1. Unified cloud architecture
A standard single-ledger accounting package cannot handle multi-framework reporting without breaking down into manual spreadsheets. Modern ERP platforms like NetSuite or Sage Intacct allow a single transaction to post simultaneously to your local statutory ledger and your consolidated reporting ledger.
2. Dual-language accounting expertise
Systems are only as strong as the specialists operating them. A pure US CPA will miss the nuanced local tax impacts embedded in French statutory books. A traditional French expert-comptable without ASC 606 or IFRS 15 training can inadvertently misstate revenue lines to an American board. True cross-border finance requires advisors who actively practice within both jurisdictions.
3. Integrated transfer pricing
Any intercompany flow — management fees, tech cost-sharing, or product distribution — must satisfy both the IRS and the DGFiP. While your accounting framework does not alter your legal transfer pricing obligations, the way intercompany provisions and cost recharges are recognized differs between PCG, IFRS, and US GAAP. Without an aligned approach, intercompany errors compound quickly.
Choosing your reporting infrastructure is not an administrative exercise. The standards you report under define what your performance looks like to global investors, dictate your cross-border tax exposure, and determine how much time your finance team spends correcting books at closing.