GAAP (generally accepted accounting principles)

GAAP (General Accounting Principles) is a set of commonly used accounting standards and financial reporting standards. The acronym is pronounced as "gap".

The GAAP specification includes definitions of concepts and principles, and industry-specific rules. The purpose of GAAP is to make sure that financial reporting is transparent and consistent across organizations.

Depending on location and industry, there is no general GAAP standard. In the United States, the US Securities and Exchange Commission (SEC) requires financial reporting to comply with GAAP requirements. The Financial Accounting Standards Board (FASB) generally regulates GAAP and the Government Accounting Standards Council (GASB) regulates state and local government GAAP. Listed companies need to comply with SEC and GAAP requirements

International financial reporting standards (IFRS) are adopted in many countries around the world. IFRS aims to provide a global framework for how listed companies can prepare and disclose financial statements. Adoption of a global set of standards simplifies accounting procedures in international countries and provides consistent financial prospects for investors and auditors. IFRS provides general guidance on the preparation of financial statements, not the industry-specific reporting rules.

In Financial Accounting, the rules are created by the Financial Accounting Standards Board (FASB) or the International Accounting Standards Board (IASB). The standards set by the FASB are collectively referred to as GAAP (Generally Accepted Accounting Principles), and the standards set by the IASB are collectively referred to as IFRS (International Financial Reporting Standards). Companies must follow these rules when sending reports to external users. Because the generated report is for internal management, there is no report rule in Controlling. This course will explain best practices for obtaining the information necessary for planning and decisions. There is no external agency to explain what our management report should be like.

In the United States, the Financial Accounting Standards Board (FASB) has established a widely accepted set of rules, standards, and procedures for reporting financial information known as GAAP (Generally Accepted Accounting Principles) I will. Other countries have similar requirements. The International Accounting Standards Board (IASB) is developing financial reporting standards (International Financial Reporting Standards, IFRS) for international applications. Publicly listed companies in the United States must also submit annual 10-K reports and quarterly 10-K reports to the US Securities and Exchange Commission (SEC). This topic guide refers to US GAAP.