Generally Accepted Accounting Principles (GAAP) are a basic set of rules that are supposed to be followed across all stages of accounting.
These Generally Accepted Accounting Principles (GAAP) include standard conventions, fair set of guidelines that an individual or an entity should follow when maintaining or reporting a financial picture of an individual or an entity ensuring that the published reports, be it audit statements, profit reports, financial statements, expense reports or any other outgoing official statements of account, are fair from manipulation, accurate and objectively impartial. GAAP rules are very similar across countries, although slight nuances do exist. For this reason, many countries, including Canada and the United States, are transitioning to International Financial Reporting Standards (IFRS).
Key aspects of (GAAP)
- Objectivity
- Consistency
- Materiality
- Non-Compensating
