Business Definition For: Generally Accepted Accounting Principles (gaap)

Business Definition for: Generally Accepted Accounting Principles (GAAP) Generally Accepted Accounting Principles (GAAP) standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. GAAP derive, in order of importance, from: (1) issuances from an authoritative body designated by the AICPA Council (for example, the FASB Statements, AICPA APB Opinions, and AICPA Accounting Research Bulletins); (2) other AICPA issuances such as AICPA Industry Guides; (3) industry practice; and (4) accounting literature in the form of books and articles. Principles also derive from tradition, such as the concept of matching. In the audit report, the CPA must indicate that the client has followed GAAP on a consistent basis. Finance term Generally Accepted Accounting Principles (GAAP) conventions, rules, and procedures that define accepted accounting practice, including broad guidelines as well as detailed procedures. The basic doctrine was set forth by the Accounting Principles Board of the American Institute of Certified Public Accountants, which was superseded in 1973 by the FASB (financial accounting standard board), an independent selfregulatory organization. Banking term Generally Accepted Accounting Principles (GAAP) accounting rules and conventions defining acceptable practices in preparing financial statements. The FASB (financial accounting standard board) , an independent self-regulatory organization, is the primary source of accounting rules followed by auditors and certified public accountants. The aim of GAAP accounting principles is uniformity in financial statements. Business term Generally Accepted Accounting Principles (GAAP) conventions, rules, and procedures that define accepted accounting practice, including broad guidelines as well as detailed procedures. Insurance term Generally Accepted Accounting Principles (GAAP) type of accounting method, in life insurance, designed to match revenues and expenses of an insurer according to principles designed by the Financial Accounting Standards Board and the Audit Guide for Stock Life Insurance Companies published by the American Institute of CPAs. For example, under GAAP, acquisition expenses (costs of placing insurance on a company's books such as administrative expenses and agent commissions) are recognized in the same proportion that premium income is recognized over the premium paying period, with losses subtracted from premium and investment income as they occur. Real estate Generally Accepted Accounting Principles (GAAP) the set of rules considered standard and acceptable by Certified Public Accountants.

Example: Accounting deductions are required for real estate depreciation, even for assets that rise in value. Related Terms: Dictionary of Business Terms FASB (financial accounting standard board) nongovernmental body with the authority to promulgate Generally Accepted Accounting Principles (GAAP) and reporting practices. These are published in the form of FASB Statements. Practicing CPAs are required to follow the FASB pronouncements in their accounting and financial reporting functions. The FASB is independent of other companies and professional organizations. The american institute of certified public accountants (AICPA) and the Securities and Exchange Commission (SEC) officially recognize the Statements issued by he Financial Accounting Standards Board. The FASB was established in 1973 to succeed the Accounting Principles Board (APB).