Generally Accepted Accounting Principles (GAAP)
Active since: 1933
Target: public and private companies, governments and non-profit organizations within the United States
Goal: a commonly recognized set of rules and procedures designed to govern corporate accounting and financial reporting
The Generally Accepted Accounting Principles is a commonly recognized set of rules and procedures designed to govern corporate accounting and financial reporting. Each country can have its own interpretation of the GAAP. However most countries use the international implementation of these principles by using the IAS and/or IFRS standard.
In the United States these are not the standard. The US GAAP is the comprehensive set of accounting practices for companies developed jointly by the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB), so they are also applied to governmental and non-profit accounting.
The 10 core principles of GAAP are:
- Permanent Methods
- Good Faith
Since 2007 the SEC allowed non-US companies registered in the US to file their financial reports according to the IFRS standards if their accounts are already IFRS compliant. Removing the obligation to reconcile the statements with US-GAAP.