Accounting Standard

AAA

DEFINITION of 'Accounting Standard'

A principle that guides and standardizes accounting practices. The Generally Accepted Accounting Principles (GAAP) are a group of accounting standards that are widely accepted as appropriate to the field of accounting. Accounting standards are necessary so that financial statements are meaningful across a wide variety of businesses; otherwise, the accounting rules of different companies would make comparative analysis almost impossible.

INVESTOPEDIA EXPLAINS 'Accounting Standard'

An accounting standard is a guideline for financial accounting, such as how a firm prepares and presents its business income and expense, assets and liabilities. The Generally Accepted Accounting Principles is comprised of a large group of individual accounting standards. GAAP standards apply to financial reporting in the United States and may be eventually phased out in favor of the International Accounting Standards.

RELATED TERMS
  1. Metcalf Report

    A critical report on the U.S. accounting profession released ...
  2. Accounting Principles Board - APB

    The prior authoritative body of the American Institute of Certified ...
  3. Financial Statements

    Records that outline the financial activities of a business, ...
  4. Accounting

    The systematic and comprehensive recording of financial transactions ...
  5. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  6. Certified Public Accountant - CPA

    A designation given by the American Institute of Certified Public ...
Related Articles
  1. Where can I find the balance sheet of ...
    Fundamental Analysis

    Where can I find the balance sheet of ...

  2. What is the difference between IAS and ...
    Investing

    What is the difference between IAS and ...

  3. What are some examples of how cash flows ...
    Personal Finance

    What are some examples of how cash flows ...

  4. What is the difference between cash ...
    Fundamental Analysis

    What is the difference between cash ...

Hot Definitions
  1. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  2. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  3. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  4. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  5. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
  6. Macroeconomics

    The field of economics that studies the behavior of the aggregate economy. Macroeconomics examines economy-wide phenomena ...
Trading Center