Regulatory Accounting Principles - RAP
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Definition of 'Regulatory Accounting Principles - RAP'A comprehensive set of rules and regulations for accounting that were introduced by the Federal Home Loan Bank Board. Regulatory accounting principles were created to assist low net-worth savings and loan associations with meeting capital requirements. These rules allowed S&Ls to amortize such items as gains or losses from sales over long periods of time. |
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Investopedia explains 'Regulatory Accounting Principles - RAP'Unfortunately, the introduction of regulatory accounting principles contributed to the downfall of many S&Ls. The relaxed rules enabled many otherwise insolvent institutions to artificially increase their net worths and continue doing business. RAP stands in contrast to GAAP (Generally Accepted Accounting Principles). |
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