US GAAP Accounting Principles
In the United States of America, generally accepted accounting principles, are more commonly known and abbreviated as US GAAP or just GAAP. These are the accounting rules that are used to make and prepare, present, and report the annual financial statements. It includes the financial statements of both the public sector companies and the private sector companies. It also includes the financial statements of various organizations that run on no profit-no loss motto. It also presents the financial statements of the government. Normally local Accounting Framework is included in GAAP that is very appreciable. This framework is most commonly related to the laws of accountancy, various standards and rules of Accounting.
The government of the United States of America does not has its own standards and rules for accountancy as it is very much similar in all other countries that practice the system of common law. It is a common belief in USA that the private sector companies are better advanced and have good and concrete knowledge about accounting and have sufficient resources.
The US GAAP is not written in the accounting law or in the constitution, but it’s the prime duty of the U.S Securities and Exchange Commission (SEC) that the US GAAP must be included and, practiced and followed in all the financial reporting that is framed up by the public sector companies. The topmost authority that sets and establishes the generally accepted accounting principles is the Financial Accounting Standards Board (FASB). FASB is responsible for maintain the GAAP for both the profit and nonprofit companies.
The Governmental Accounting Standards Board (GASB) determines the GAAP for all the state and local body governments. This is functional under a set of objectives, principles, assumptions and constraints that are almost entirely different from the GAAP of private-sector companies.
The US GAAP laws are somewhat different from the International Financial Reporting Standards (IFRS).
Written by: Matt
We also suggest this relevant article if you have time: What is Supportive Leadership?
Most Commented Posts
Tagged as accounting principles, annual financial statements, common law, concrete knowledge, financial accounting standards, financial accounting standards board, financial accounting standards board fasb, financial reporting standards, gasb, government of the united states of america, governmental accounting standards, governmental accounting standards board, international financial reporting standards, nonprofit companies, private sector companies, public sector companies, securities and exchange commission, us gaap + Categorized as Finance