GAAP

abbr.
generally accepted accounting principles

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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.

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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, AICPAAPB Opinions, and AICPAAccounting 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.

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The common set of accounting principles, standards and procedures that companies use to compile their financial statements. GAAP are a combination of authoritative standards (set by policy boards) and simply the commonly accepted ways of recording and reporting accounting information.

Investopedia Says:
GAAP are imposed on companies so that investors have a minimum level of consistency in the financial statements they use when analyzing companies for investment purposes. GAAP cover such things as revenue recognition, balance sheet item classification and outstanding share measurements. Companies are expected to follow GAAP rules when reporting their financial data via financial statements. If a financial statement is not prepared using GAAP principles, be very wary!

That said, keep in mind that GAAP is only a set of standards. There is plenty of room within GAAP for unscrupulous accountants to distort figures. So, even when a company uses GAAP, you still need to scrutinize its financial statements.

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is short for:

Meaning	Category
General Assistance Advocacy Project	Community
General Aviation Aerodrome Procedures	Governmental->Transportation
General Aviation Airport Procedures	Governmental->Transportation
General Aviation Airport Program	Miscellaneous->Unfiled
Generally Accepted Accounting Principles	Business->Accounting Business->International Business Business->General Governmental->Transportation Governmental->US Government Business->Mortgage Governmental->Military
Greater Access to Affordable Pharmaceuticals Act of 2003	Governmental->FDA
Growth At Any Price	Business->General

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