Generally Accepted Accounting Principles (United States)
In the United States, Generally Accepted Accounting Principles are accounting rules used to prepare, present and report financial statements for a wide variety of entities, including publicly traded and privately held companies, non-profit organizations, and government authorities. The term is usually confined to the United States; where it is commonly abbreviated as US GAAP or simply GAAP. However, theoretically, Generally Accepted Accounting Principles encompass all accepted rules which generally apply to accountancy, and not only the United States.
Like many other common law countries, the United States government does not directly set accounting standards by statute. However, the U.S. Securities and Exchange Commission (SEC) requires that US GAAP be followed in financial reporting by publicly traded companies. Currently, the Financial Accounting Standards Board (FASB) establishes generally accepted accounting principles for public and private companies, as well as for non-profit organizations. For local and state governments, the Governmental Accounting Standards Board (GASB) determines the GAAP which operate using a set of assumptions, principles, and constraints, different from those of standard private-sector GAAP. The Federal Accounting Standards Advisory Board (FASAB) regulates the financial reporting standards in federal government entities.
The US GAAP provisions differ somewhat from International Financial Reporting Standards (IFRS), though former SEC Chairman Christopher Cox set out a timetable for all U.S. companies to drop GAAP by 2016, with the largest companies switching to IFRS as early as 2009.
The FASB expressed US GAAP in XBRL beginning in 2008.
Read more about Generally Accepted Accounting Principles (United States): History, Basic Objectives, Basic Concepts, Required Departures From GAAP, Setting GAAP, Precedence of GAAP-setting Authorities, Codification in Accounting - FASB Accounting Standards Codification
Famous quotes containing the words generally, accepted, accounting and/or principles:
“He generally added the syllable um to his words when he could,—as paddlum, etc.”
—Henry David Thoreau (1817–1862)
“The percept is the reality. It is not in propositional form. But the most immediate judgment concerning it is abstract. It is therefore essentially unlike the reality, although it must be accepted as true to that reality. Its truth consists in the fact that it is impossible to correct it, and in the fact that it only professes to consider one aspect of the percept.”
—Charles Sanders Peirce (1839–1914)
“I, who am king of the matter I treat, and who owe an accounting for it to no one, do not for all that believe myself in all I write. I often hazard sallies of my mind which I mistrust.”
—Michel de Montaigne (1533–1592)
“I have ever deemed it fundamental for the United States never to take active part in the quarrels of Europe. Their political interests are entirely distinct from ours. Their mutual jealousies, their balance of power, their complicated alliances, their forms and principles of government, are all foreign to us. They are nations of eternal war.”
—Thomas Jefferson (1743–1826)