What are Generally Accepted Accounting Principles (GAAP)?
GAAP is a set of Generally Accepted Accounting Principles that are used during the preparation of financial statements. It is through GAAP that the principles behind accounting theory and reporting are established. Most industries in the United States are expected to conform to GAAP principles when preparing and distributing financial information. These guidelines are determined and reviewed by the Financial Accounting Standards Board (FASB) as a means to standardize and present financial information. Through this standardization, corporate financial information can more readily be reviewed and interpreted by investors, banks and other potential creditors. GAAP places all companies on a level playing field by ensuring that any financial information presented is uniformly consistent, relevant, feasible and objective. In the US, GAAP usually refers to US GAAP as promulgated by FASB. However, other sets of GAAP exist. For example, iGAAP is sometimes used when talking about International F
