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:
“Times of heroism are generally times of terror, but the day never shines in which this element may not work.”
—Ralph Waldo Emerson (1803–1882)
“We accepted this war for an object, a worthy object, and the war will end when that object is attained. Under God, I hope it never will until that time.”
—Abraham Lincoln (1809–1865)
“At the crash of economic collapse of which the rumblings can already be heard, the sleeping soldiers of the proletariat will awake as at the fanfare of the Last Judgment and the corpses of the victims of the struggle will arise and demand an accounting from those who are loaded down with curses.”
—Karl Liebknecht (1871–1919)
“A bureaucracy is sure to think that its duty is to augment official power, official business, or official members, rather than to leave free the energies of mankind; it overdoes the quantity of government, as well as impairs its quality. The truth is, that a skilled bureaucracy ... is, though it boasts of an appearance of science, quite inconsistent with the true principles of the art of business.”
—Walter Bagehot (1826–1877)