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Generally Accepted Accounting Principles (GAAP)

See Also:
Financial Ratios
Accrual Based Accounting
Modified Accelerated Cost Recovery System MACRS
How to Develop a Chart of Accounts
Asset

GAAP¶

Generally accepted accounting principles are a set of standards, guidelines, and regulations for financial accounting. Companies should follow GAAP rules when preparing financial statements.

GAAP rules were established to provide consistency in financial reporting and accounting practices. The rules evolve over time and are meant to reflect the most relevant and applicable accounting practices.

In the U.S., several organizations influence GAAP rules, including the Financial Accounting Standards Board (FASB), the American Institute of Certified Public Accountants (AICPA), the Securities and Exchange Commission (SEC), and the Internal Revenue Service (IRS). U.S. GAAP differs from other international accounting standards, but organizations like FASB and the International Accounting Standards Board (IASB) are working to establish acceptable international accounting standards.