Generally Accepted Accounting Principles - GAAP
Definition of 'Generally Accepted Accounting Principles - GAAP'The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information. |
|
Investopedia explains 'Generally Accepted Accounting Principles - GAAP'GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. Companies are expected to follow GAAP rules when reporting their financial data via financial statements. If a financial statement is not prepared using GAAP principles, be very wary!That said, keep in mind that GAAP is only a set of standards. There is plenty of room within GAAP for unscrupulous accountants to distort figures. So, even when a company uses GAAP, you still need to scrutinize its financial statements. What to know more about GAAP? Please read: The Impact Of Combining The U.S. GAAP and IFRS |
|
Related Definitions
-
Hierarchy Of GAAP
-
Accountant International Study Group - AISG
-
Regulatory Accounting Principles - RAP
-
Chartered Accountant - CA
-
Financial Statements
-
Certified Public Accountant - CPA
-
Generally Accepted Auditing Standards - GAAS
-
International Accounting Standards - IAS
-
Deferred Charge
-
Accounting Research Bulletins - ARB
Articles Of Interest
-
Depreciation: Straight-Line Vs. Double-Declining Methods
Appreciate the different methods used to describe how book value is "used up". -
GAAP
Learn more about the generally accepted accounting principles, standards and procedures that companies use to compile their financial statements. -
Detecting Accounting Manipulation
"One-time charges" and "investment gains" are two strategies companies can use to distort their numbers. -
A Guide To Careers In Accounting Information Systems
We provide an overview of the types of AIS jobs available, and the education and training requirements to enter this field. -
12 Things You Need To Know About Financial Statements
Discover how to keep score of companies to increase your chances of choosing a winner. -
Financial Footnotes: Start Reading The Fine Print
Find out what could be hidden in this often-overlooked part of the financial statements. -
Financial Statement Manipulation An Ever-Present Problem For Investors
The SEC has taken steps to eliminate this type of corporate fraud, but it remains a real risk for investors. -
Equity Valuation In Good Times And Bad
Learn how to filter out the noise of the market place in order to find a solid way of determing a company's value. -
What's the difference between EBITDA, EBITDAR and EBITDARM?
EBITDA, EBITDAR and EBITDARM are analytic indicators commonly used by management to evaluate the financial performance and resource allocation for operating units within a company. These tools ... -
Mark-To-Market: Tool Or Trouble?
Mark-to-market accounting can be a valuable practice, but all bets are off when the market fluctuates wildly.
Free Annual Reports