Register now or log in to join your professional community.
GAAP is short for Generally Accepted Accounting Principles. GAAP is a large group of accounting standards and common industry usage that have been developed over many years, and that are used by businesses to:
One of the reasons for using GAAP is so that anyone reading the financial statements of multiple companies has a reasonable basis for comparison, since all companies using GAAP have created their financial statements using the same set of rules. GAAP covers a broad array of topics, including:
The Deviation from certain principles and practices followed globally in the field of accounting will create innumerable practical difficulties and wrong interpretations. In order to avoid this, It came to identify certain areas to which a uniform accounting procedures/principles are applicable and generally known as GAAP. GAAP is an international convention of good accounting practices. It recognised certain core principles to be followed to have a fair practice in accounting while disclosing to the true and fair affairs of a business entity. In certain instances particular deviations from these principles can be held liable.
Generally accepted accounting principles (GAAP) refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice. These include the standards, conventions, and rules that accountants follow in recording and summarizing and in the preparation of financial statements