0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What is the purpose of GAAP?
Generally Accepted Accounting Principles, or GAAP, are the standards used by accountants. GAAP ensures that all companies report financial information in a consistent manner.
What are the advantages of audit report?
-it shows that the financial transaction of the company is true and fair and comply with (GAAP) it attracts investors
Does a nonprofit have to follow GAAP?
Yes. IN the US non profits are expected to follow GAAP accounting rules. In Europe and expanding to most other parts of the developed world, companies are using IFRS.
What is Importance of GAAP?
GAAP is an acronym for Generally Accepted Accounting Principles, which is the standard guideline and rules that need to be followed in a particular jurisdiction. Many people rely on objective reporting of financial information by companies and other individuals, and the GAAP help ensure that data is unbiased and consistent.
What are the criteria for general acceptance of accounting principles?
Some GAAP principles are meant to improve or standardize recording and reporting of financial statements. Companies are expected to follow the GAAP principles when presenting financial statements.
What is the purpose of GAAP?
Generally Accepted Accounting Principles, or GAAP, are the standards used by accountants. GAAP ensures that all companies report financial information in a consistent manner.
Who can issue disclosure requirements for companies under its jurisdiction that may exceed gaap?
Sec, gaap,
What are the advantages of audit report?
-it shows that the financial transaction of the company is true and fair and comply with (GAAP) it attracts investors
Does a nonprofit have to follow GAAP?
Yes. IN the US non profits are expected to follow GAAP accounting rules. In Europe and expanding to most other parts of the developed world, companies are using IFRS.
What is Importance of GAAP?
GAAP is an acronym for Generally Accepted Accounting Principles, which is the standard guideline and rules that need to be followed in a particular jurisdiction. Many people rely on objective reporting of financial information by companies and other individuals, and the GAAP help ensure that data is unbiased and consistent.
Difference between Indian gaap and us gaap?
MAJOR DIFFERENCES: 1. Underlying assumptions: Under Indian GAAP, Financial statements are prepared in accordance with the principle of conservatism which basically means "Anticipate no profits and provide for all possible losses". Under US GAAP conservatism is not considered, if it leads to deliberate and consistent understatements---revenue recognized when earned or when it is realized or realizable. 2. Format/ Presentation of financial statements: Under Indian GAAP, financial statements are prepared in accordance with the presentation requirements of Schedule VI to the Companies Act, 1956. On the other hand , financial statements prepared as per US GAAP are not required to be prepared under any specific format as long as they comply with the disclosure requirements of US GAAP. 3. Cash flow statement: Under Indian GAAP (AS 3) , inclusion of Cash Flow statement in financial statements is mandatory only for companies whose share are listed on recognized stock exchanges and Certain enterprises whose turnover for the accounting period exceeds Rs. 50 crore. Thus , unlisted companies escape the burden of providing cash flow statements as part of their financial statements. On the other hand, US GAAP (SFAS 95) mandates furnishing of cash flow statements for 3 years - current year and 2 immediate preceding years irrespective of whether the company is listed or not . 4. Depreciation: Under the Indian GAAP, depreciation is provided based on rates prescribed by the Companies Act, 1956. US GAAP , depreciation has to be provided over the estimated useful life of the asset, 5. Long term Debts: Under US GAAP , the current portion of long term debt is classified as current liability, whereas under the Indian GAAP, there is no such requirement and hence the interest accrued on such long term debt in not taken as current liability. 6. Consolidation of subsidiary accounts: Under the Indian GAAP, consolidation of accounts of subsidiary companies is not mandatory. Under US GAAP (SFAS 94),Consolidation of results of Subsidiary Companies is mandatory. 7. Investments: Under Indian GAAP (AS 13), Investments are classified as current and long term. Investments are required to be segregated in 3 categories i.e. held to Maturity Security ( Primarily Debt Security) , Trading Security and Available for sales Security and should be further segregated as Current or Non current on Individual basis.
What are the criteria for general acceptance of accounting principles?
Some GAAP principles are meant to improve or standardize recording and reporting of financial statements. Companies are expected to follow the GAAP principles when presenting financial statements.
In Government contracting one criterion for cost allowability is that the contractor's costs must comply with Generally Accepted Accounting Principles (GAAP) and Government Cost Accounting Standards (?
true
Who must use GAAP and why?
Who? US publicly traded companies. Non-publicly traded companies may be required to produce a set of financial statements in accordance with GAAP if applying for a loan. Why? GAAP accounting is nothing more than a common set of principals, terminology, etc. It allows for better communication between organizations, stockholders, individuals, etc. For example, with GAAP the term Revenue means the same thing, no misunderstandings. If you did not have a common set of principals you would not be able to compare on company to another.
Where GAAP is implementing in Pakistan?
gaap
Why are generally accepted accounting principles needed?
GAAP allows for the fair comparison of accounting information. GAAP allows the work of the accountant to be scrutinized and analyzed on an even level with other similar firms. It allows for greater transparency in accounting practices.
Will you comply with the company laid down rules and regulations?
All companies have rules and regulations. If you want to be hired, or keep your job, it is best to follow all rules and regulations.
