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©I’M W.O.K.E. & I’M PROUD!; “FINANCIAL/ECONOMIC, SYSTEMIC DISCRIMINATION”=AGAIN; Using The Law To Break The Law
TO MOST PEOPLE: 2+2 MAKES 4/FOUR BUT, CRIMINALS OF RICO AND PONZI SCHEMES AND SOME WHO USE "GAAP"=2$+2$ MAKES 99/$$$, OUT YO POCKETS!!!
Terry "the Warrior" Reece
Oct 3, 2023
http://www.familymediasite.com..../im-w-o-k-e-im-proud
©I’M W.O.K.E. & I’M PROUD!; “FINANCIAL/ECONOMIC, SYSTEMIC DISCRIMINATION”=AGAIN; Using The Law To Break The Law
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FOLLOWING UP FROM THE STORY/ARTICLE, THE OTHER DAY; Using The Law To Break The Law (http://www.familymediasite.com..../im-w-o-k-e-using-th AND (https://terryreece.substack.co....m/.../im-woke-and-im BECAUSE I HAVE AND DO MAKE SOME SMALL/TINY “INVESTMENTS”; LET’S JUST EXPLORE 1/ONE/SOME OF THE “MANY CRIMES/FRAUDS THAT T-MAN HAS DONE TO THE WORLD…NOT EVEN GETTING INTO HIS “MURDEROUS CRIMES AND ATTEMPTED “INTERNATIONAL MOB BOSS CRIMES”=LET’S JUST TAKE A “LOOK-SEE” AT: GAAP: Understanding It and the 10 Key Principles
CORPORATE FINANCE
CORPORATE FINANCE BASICS
GAAP: Understanding It and the 10 Key Principles
U.S. public companies must follow GAAP for their financial statements
By
JASON FERNANDO
Updated May 24, 2023
Reviewed by
DAVID KINDNESS
Fact checked by
SUZANNE KVILHAUG
Suzanne Kvilhaug
Fact checked by Suzanne Kvilhaug
Full Bio
Suzanne is a content marketer, writer, and fact-checker. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands.
Learn about our editorial policies (
CORPORATE FINANCE
CORPORATE FINANCE BASICS
GAAP: Understanding It and the 10 Key Principles
U.S. public companies must follow GAAP for their financial statements
By
JASON FERNANDO
Updated May 24, 2023
Reviewed by
DAVID KINDNESS
Fact checked by
SUZANNE KVILHAUG
Suzanne Kvilhaug
Fact checked by Suzanne Kvilhaug
Full Bio
Suzanne is a content marketer, writer, and fact-checker. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands.
Learn about our editorial policies
What Are the Generally Accepted Accounting Principles (GAAP)?
Generally accepted accounting principles (GAAP) refer to a common set of accounting rules, standards, and procedures issued by the Financial Accounting Standards Board (FAS. Public companies in the U.S. must follow GAAP when their accountants compile their financial statements.
GAAP is guided by ten key tenets and is a rules-based set of standards. It is often compared with the International Financial Reporting Standards (IFRS), which is considered more of a principles-based standard. IFRS is a more international standard, and there have been recent efforts to transition GAAP reporting to IFRS.
KEY TAKEAWAYS
GAAP is the set of accounting rules set forth by the FASB that U.S. companies must follow when putting together financial statements.
GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information.
GAAP may be contrasted with pro forma accounting, which is a non-GAAP financial reporting method.
The ultimate goal of GAAP is to ensure a company’s financial statements are complete, consistent, and comparable.
GAAP is used mainly in the U.S., while most other jurisdictions use the IFRS standards.
Generally Accepted Accounting Principles (GAAP)
Theresa Chiechi / Investopedia
Understanding GAAP
GAAP is a combination of authoritative standards (set by policy boards) and the commonly accepted ways of recording and reporting accounting information. GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information.
GAAP may be contrasted with pro forma accounting, which is a non-GAAP financial reporting method. Internationally, the equivalent to GAAP in the U.S. is referred to as International Financial Reporting Standards (IFRS). IFRS is currently used in 166 jurisdictions.1
GAAP helps govern the world of accounting according to general rules and guidelines. It attempts to standardize and regulate the definitions, assumptions, and methods used in accounting across all industries. GAAP covers such topics as revenue recognition, balance sheet classification, and materiality.
The ultimate goal of GAAP is to ensure a company’s financial statements are complete, consistent, and comparable. This makes it easier for investors to analyze and extract useful information from the company’s financial statements, including trend data over a period of time. It also facilitates the comparison of financial information across different companies.
The 10 Key Principles of GAAP
There are 10 general concepts that lay out the main mission of GAAP.2
1. Principle of Regularity
The accountant has adhered to GAAP rules and regulations as a standard.
2. Principle of Consistency
Accountants commit to applying the same standards throughout the reporting process, from one period to the next, to ensure financial comparability between periods. Accountants are expected to fully disclose and explain the reasons behind any changed or updated standards in the footnotes to the financial statements.
3. Principle of Sincerity
The accountant strives to provide an accurate and impartial depiction of a company’s financial situation.
4. Principle of Permanence of Methods
The procedures used in financial reporting should be consistent, allowing a comparison of the company’s financial information.
5. Principle of Non-Compensation
Both negatives and positives should be reported with full transparency and without the expectation of debt compensation.
6. Principle of Prudence
This refers to emphasizing fact-based financial data representation that is not clouded by speculation.
7. Principle of Continuity
While valuing assets, it should be assumed the business will continue to operate.
8. Principle of Periodicity
Entries should be distributed across the appropriate periods of time. For example, revenue should be reported in its relevant accounting period.
9. Principle of Materiality
Accountants must strive to fully disclose all financial data and accounting information in financial reports.
10. Principle of Utmost Good Faith
Derived from the Latin phrase uberrimae fidei used within the insurance industry. It presupposes that parties remain honest in all transactions.
Compliance With GAAP
If a corporation’s stock is publicly traded, its financial statements must adhere to rules established by the U.S. Securities and Exchange Commission (SEC). The SEC requires that publicly traded companies in the U.S. regularly file GAAP-compliant financial statements in order to remain publicly listed on the stock exchanges.3 GAAP compliance is ensured through an appropriate auditor’s opinion, resulting from an external audit by a certified public accounting (CPA) firm...CONT...
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©I’M W.O.K.E. & I’M PROUD!; “FINANCIAL/ECONOMIC, SYSTEMIC DISCRIMINATION”=AGAIN; Using The Law To Break The Law
TO MOST PEOPLE: 2+2 MAKES 4/FOUR BUT, CRIMINALS OF RICO AND PONZI SCHEMES AND SOME WHO USE "GAAP"=2$+2$ MAKES 99/$$$, OUT YO POCKETS!!! 😎😟😒😞😒..HOWW "2+2 CAN EQUAL/=99" FOR THE 1% OF HUMANITY!!!???
Terry Reece
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