Definition

GAAP (generally accepted accounting standards)

Part of the Compliance glossary:

GAAP (pronounced "gap") stands for "generally accepted accounting principles," a collection of commonly followed accounting rules and standards for financial reporting.

GAAP specifications include definitions of concepts and principles, as well as industry-specific rules. The purpose of GAAP is to ensure that financial reporting is transparent and consistent from one organization to another.

There is no universal GAAP standard and the specifics vary from one geographic location or industry to another. In the United States, the Securities and Exchange Commission (SEC) mandates that financial reports adhere to GAAP requirements. The Financial Accounting Standards Board (FASB) stipulates GAAP overall and the Governmental Accounting Standards Board (GASB) stipulates GAAP for state and local government. Publicly traded companies must comply with both SEC and GAAP requirements.

Many countries around the world have adopted the International Financial Reporting Standards (IFRS). IFRS is designed to provide a global framework for how public companies prepare and disclose their financial statements. Adopting a single set of world-wide standards simplifies accounting procedures for international countries and provides investors and auditors with a cohesive view of finances. IFRS provides general guidance for the preparation of financial statements, rather than rules for industry-specific reporting. 

 


 

This was last updated in July 2014
Posted by: Margaret Rouse

Related Terms

Definitions

  • contingency plan

    - In business continuity and risk management, a contingency plan is a process that prepares an organization to respond coherently to an unplanned event. (WhatIs.com)

  • opt-out

    - Opt-out communications are messages sent for marketing, promotion or fundraising that include an option for the recipient to be removed from any future messages. The term was originally applied mos... (WhatIs.com)

  • commercial electronic message (CEM)

    - A commercial electronic message (CEM) is a communication soliciting business, funding or support for something that is sent through any electronic channel, including email, social media, voicemail,... (WhatIs.com)

Glossaries

  • Compliance

    - Terms related to compliance, including regulatory definitions and words and phrases about governance and mitigating IT risk.

  • Internet applications

    - This WhatIs.com glossary contains terms related to Internet applications, including definitions about Software as a Service (SaaS) delivery models and words and phrases about web sites, e-commerce ...

Ask a Question About GAAP (generally accepted accounting standards)Powered by ITKnowledgeExchange.com

Get answers from your peers on your most technical challenges

Tech TalkComment

Share
Comments

    Results

    Contribute to the conversation

    All fields are required. Comments will appear at the bottom of the article.