Required Departures From GAAP
Under the AICPA's Code of Professional Ethics under Rule 203 - Accounting Principles, a member must depart from GAAP if following it would lead to a material misstatement on the financial statements, or otherwise be misleading. In the departure the member must disclose, if practical, the reasons why compliance with the accounting principle would result in a misleading financial statement. Under Rule 203-1-Departures from Established Accounting Principles, the departures are rare, and usually take place when there is new legislation, the evolution of new forms of business transactions, an unusual degree of materiality, or the existence of conflicting industry practices.
Read more about this topic: Generally Accepted Accounting Principles (United States)
Famous quotes containing the word required:
“In properly organized groups no faith is required; what is required is simply a little trust and even that only for a little while, for the sooner a man begins to verify all he hears the better it is for him.”
—George Gurdjieff (c. 1877–1949)