GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Generally accepted accounting principles (GAAP) are the accounting rules used to prepare financial statements for publicly traded companies and many private companies in the United States.

In the United States, as well as other countries practicing English common law system, the government does not set accounting standards, in the belief that the private sector has better knowledge and resources. The GAAP is not written in law, although the SEC requires that it be followed in financial reporting by publically traded companies.

Conceptual frame work

GAAP has four basic principles. The historical cost principle requires companies to account and report based on acquisition costs rather than fair market value for most assets and liabilities. The revenue recognition principle requires to record when revenue is realized or realizable and earned, not when cash is received. The way of accounting is called accrual basis accounting. The third principle is the matching principle. Expenses have to be matched with revenues as long as it is reasonable doing so. The last principle is called the full disclosure principle. Amount and kinds of information disclosed should be decided based on trade-off analysis as larger amount of information costs more to prepare and use it. Information disclosed should be enough to make judgement while keeping costs reasonable.

Setting GAAP

Those organizations influence developing GAAP in the United States.

Securities and Exchange Commission (SEC)
American Institute of Certified Public Accountants (AICPA)
Financial Accounting Standards Board (FASB)
Governmental Accounting Standards Board (GASB)
Other influential organizations

GAAP is composed of various documents. Accounting Principles Board (APB) dissolved in 1973 and the FASB took over the responsibility setting up the standards.

House of GAAP

Category (d)
(Least authoritative) AICPA Accounting Interpretations FASB Implementation Guides (Q and A) Widely recognized and prevalent industry practices

Category (c) FASB Emerging Issues Task Force AICPA AcSEC Practice Bulletins

Category (b) FASB Technical Bulletins AICPA Industry Audit and Accounting Guides AICPA Statements of Position

Category (a)
(Most authoritative) FASB Standards and Interpretations APB Opinions AICPA Accounting Research Bulletins

	House of GAAP
Category (d) (Least authoritative)	AICPA Accounting Interpretations	FASB Implementation Guides (Q and A)	Widely recognized and prevalent industry practices
Category (c)	FASB Emerging Issues Task Force	AICPA AcSEC Practice Bulletins
Category (b)	FASB Technical Bulletins	AICPA Industry Audit and Accounting Guides	AICPA Statements of Position
Category (a) (Most authoritative)	FASB Standards and Interpretations	APB Opinions	AICPA Accounting Research Bulletins

Commercial Usage: GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Domain	Title
Books	Wiley GAAP 2002: Interpretations and Applications of Generally Accepted Accounting Principles 2002 (reference) Wiley GAAP 2003: Interpretation and Application of Generally Accepted Accounting Principles (reference) Wiley Gaap 99: Interpretation and Application of Generally Accepted Accounting Principles 1999 (Annual) (reference) Wiley GAAP for Governments 2002: Interpretation and Application of Generally Accepted Accounting Principles for State and Local Governments (reference) Wiley Not-for-Profit GAAP 2003: Interpretation and Application of Generally Accepted Accounting Principles (reference) (more book examples)
Source: compiled by the editor from various references; see credits.

Non-Fiction Usage: GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Subject	Topic	Quote
Economic History	Honduras	In general, Honduran businesses adhere to international Generally Accepted Accounting Principles (GAAP). (references)
	Philippines	Generally Accepted Accounting Principles (GAAP) in the United States significantly influenced the development of the Philippines' GAAP. (references)
	Senegal	As of January 1, 1998, the UEMOA countries present their financial statements in accordance with the SYSCOA system, which is based on Generally Accepted Accounting Principles in France. (references)
Source: compiled by the editor from ICON Group International, Inc.; see credits.

Modern Translation: GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Language		Translations for "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES"; alternative meanings/domain in parentheses.
Danish		grundlæggende regnskabsprincipper. (various references)

Dutch		algemeen aanvaarde boekhoudbeginselen. (various references)

German		allgemein anerkannte Buchführungsgrundsätze. (various references)

Greek		γενικά αποδεκτές λογιστικές αρχές. (various references)

Italian		principi contabili generalmente accettati. (various references)

Pig Latin		enerallygay accepteday accountingay inciplespray

Portuguese		princípios contabilísticos geralmente aceites. (various references)

Spanish		principios contables generalmente aceptados. (various references)
Source: compiled by the editor from various translation references.

Domain	Definition
Finance	Accounting rules and procedures adopted by the accounting profession to facilitate uniformity in preparing financial statements. (GAAP). (references)
Source: compiled by the editor from various references; see credits.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Specialty Definition: GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Finance

Specialty Definition: US generally accepted accounting principles

Conceptual frame work

Setting GAAP

Crosswords: GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Commercial Usage: GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Books

Non-Fiction Usage: GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Economic History

Honduras

Philippines

Senegal

Modern Translation: GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Danish

Dutch

German

Greek

Italian

Pig Latin

Portuguese

Spanish

INDEX