Preparing US GAAP Financials for US Investors: A Malaysian Startup Guide
As Malaysian startups expand their ambitions to include U.S.-based investors, one critical consideration is preparing financial statements that comply with US GAAP (Generally Accepted Accounting Principles).
For many founders, navigating this shift from local standards can be daunting — but it’s also an essential step for securing U.S. capital and building long-term credibility.
This guide breaks down why US GAAP matters, how it differs from MFRS/IFRS, and what Malaysian startups should do to comply — with insights from a trusted accounting firm in Malaysia.
For many founders, navigating this shift from local standards can be daunting — but it’s also an essential step for securing U.S. capital and building long-term credibility.
This guide breaks down why US GAAP matters, how it differs from MFRS/IFRS, and what Malaysian startups should do to comply — with insights from a trusted accounting firm in Malaysia.
What Is US GAAP and Why Does It Matter?
US GAAP refers to the standardized accounting principles issued by the Financial Accounting Standards Board (FASB) and used by all publicly traded U.S. companies. These standards are known for their detailed, prescriptive nature.
Want to understand the basics?
Read US GAAP: What Are The 10 Key Principles? for a quick overview.
Want to understand the basics?
Read US GAAP: What Are The 10 Key Principles? for a quick overview.
Why US GAAP Compliance Is Essential:
- Investor Trust: U.S. investors expect financial statements that are consistent, comparable, and compliant.
- Capital Access: VC and private equity firms may require GAAP-compliant reports as part of due diligence.
- IPO Readiness: If you plan to list on a U.S. exchange in the future, GAAP compliance is mandatory.
Explore the US Desk at ShineWing TY TEOH to see how their cross-border experts can support your startup.
Key Differences Between MFRS/IFRS and US GAAP
Most Malaysian startups prepare their accounts using MFRS, which is closely aligned with IFRS. However, significant differences exist between IFRS and US GAAP that you must address.
For a detailed breakdown, read US GAAP vs. IFRS: Key Differences in Accounting Explained.
Some key differences include:
- Revenue Recognition: Under ASC 606, GAAP provides a five-step model for recognizing revenue. Learn more in 5 Steps in the US GAAP Revenue Recognition Model.
- Lease Accounting: GAAP’s ASC 842 requires most leases to be capitalized, including operating leases.
- Development Costs: US GAAP generally expensed immediately, unlike IFRS, which may allow capitalization.
- Inventory Methods: LIFO is permitted under GAAP but not under IFRS/MFRS.
Steps for Transitioning to US GAAP
If you’re preparing to raise capital from U.S. investors, here’s a roadmap to help:
1. Perform a Gap Analysis
Compare your current MFRS statements against US GAAP with help from experienced advisors. ShineWing’s Audit and Assurance team can assist with the technical review.
2. Update Internal Policies and Controls
Work with professionals to realign your accounting policy documentation to meet GAAP standards.
3. Train Your Finance Team
Equip your internal staff with training and workshops on U.S. financial reporting — or outsource. See why many startups prefer outsourcing accounting services.
4. Engage with US-Focused Advisors
Tap into cross-border experts through the US Desk for ongoing compliance and reporting.
Common Challenges and How to Overcome Them
1. Lack of Internal Expertise
US GAAP is technical and unfamiliar to most startup finance teams.
Solution: Engage a trusted accounting firm in Malaysia with proven experience in cross-border reporting and GAAP conversions.
Solution: Engage a trusted accounting firm in Malaysia with proven experience in cross-border reporting and GAAP conversions.
2. Time-Consuming Adjustments
Backdating financial statements or restating comparative figures can drain resources.
Solution: Plan early and use tools and systems that support dual reporting standards.
Solution: Plan early and use tools and systems that support dual reporting standards.
3. Revenue Recognition Confusion
Malaysian startups may struggle with contract interpretation under ASC 606.
Solution: Refer to US GAAP Revenue Recognition Model or seek direct support from ShineWing TY TEOH’s technical team.
Solution: Refer to US GAAP Revenue Recognition Model or seek direct support from ShineWing TY TEOH’s technical team.
Why ShineWing TY TEOH Is the Right Partner
With decades of experience serving both local SMEs and international clients, ShineWing TY TEOH offers the full suite of services you need to meet U.S. financial expectations:
Our team is equipped to help you prepare, transition, and maintain full GAAP compliance — whether you’re fundraising, expanding, or preparing for IPO.
Conclusion: Take the First Step Toward Global Growth
Preparing US GAAP-compliant financial statements may seem like a major leap for a Malaysian startup — but with the right support and roadmap, it’s an achievable and valuable step.
By aligning your financial reporting with global standards, you improve your credibility, appeal to international investors, and future-proof your business.
Ready to get started? Contact ShineWing TY TEOH to speak with a US GAAP advisor today.
By aligning your financial reporting with global standards, you improve your credibility, appeal to international investors, and future-proof your business.
Ready to get started? Contact ShineWing TY TEOH to speak with a US GAAP advisor today.
