What Does 'GAAP' Mean?

GAAP is a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Generally Accepted Accounting Principles (GAAP) Generally accepted accounting principles (GAAP) refer to a common set of accepted accounting principles, standards, and procedures that companies and their accountants must follow when they compile their financial statements. GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. GAAP improves the clarity of the communication of financial information. GAAP may be contrasted with pro forma accounting and with the IFRS standards, which are both considered to be non-GAAP. Read More » Related to "Generally Accepted Accounting Principles (GAAP)" IFRS vs. GAAP: What's the Difference? IFRS is a set of international accounting standards, while GAAP is a set of rules that accountants follow. Each country has its own version of GAAP if they do not follow IFRS. Read More » How does US accounting differ from international accounting? GAAP is considered to be rules-based, where rules are made for specific cases and do not exactly represent a larger principle. IFRS is principles-based. Read More » When and Why Were GAAP First Established? Take a deeper look into the development and purpose of the generally accepted accounting principles, also known as GAAP, for financial reporting. Read More » Related Definitions Accounting Principles Accounting principles are the rules and guidelines that companies must follow when reporting financial data. Read More » Financial Statements Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements include the balance sheet, income statement, and cash flow statement. Read More » Balance Sheet A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time. Read More » Securities and Exchange Commission (SEC) The Securities and Exchange Commission (SEC) is a U.S. government agency created by Congress to regulate the securities markets and protect investors. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy