Class notes
GAAP
- Course
- MAT 120
- Institution
- Central Virginia Community College
This is the basics of GAAP, accounting standards
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Generally Accepted AccountingPrinciples (GAAP)
UNIVERSITY OF VIRGINIA
Organized standards and rules focused on financial reporting in
the U.S. to ensure the highest transparency, consistency, and
comparability levels. Some of the essential principles incorporated
in the U.S. GAAP include the Economic Entity Assumption, the
Revenue Recognition Principle, the Matching Principle, and
others
Overall, the usage of GAAP is regulated by FASB or Financial
accounting standards. In contrast to U.S. GAAP, IFRS is
principles-based. However, there are several reasons why GAAP
is vital and even more effective in some areas. First, it boosts
investor confidence, second, it enforces regulatory and legal
requirements, and third, it enables accurate financial statement
comparison of businesses. Hence, a proper understanding of
GAAP is essential for accounting and financial professionals.
REFERENCES:
1. FINANCIAL ACCOUNTING STANDARDS BOARDS (FASB)
2. AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA)
3. INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS)
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