If you are into accounting, you might have come across the acronym GAAP, at least once. GAAP can be expanded to Generally Accepted Accounting Principle, which are the standards that encompass the details, complexities, and legalities of business and corporate accounting. GAAP can also be defined as a combination of authoritative standards and the commonly accepted ways of recording and reporting accounting information. GAAP is used by Financial Accounting Standards Board (FASB) as the foundation for its comprehensive set of approved accounting methods and practices. GAAP is postulated on top of 10 concepts, which are, Principle of Regularity, Principle of Consistency, Principle of Sincerity, Principle of Permanence of Methods, Principle of Non-compensation, Principle of Prudence, Principle of Continuity, Principle of Periodicity, Principle of Materiality and Principle of Utmost Good Faith. GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information. The ultimate goal of GAAP is to ensure a company's financial statements are complete, consistent, and comparable. Please see the Presentation for further details.

John U

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