Gaap Definition
Generally Accepted Accounting Principles (GAAP) are a set of accounting rules that have been developed and maintained by the Financial Accounting Standards Board (FASB). GAAP provides guidance for financial reporting so that users of financial statements can know what to expect from those statements. The purpose of GAAP is to ensure that financial statements are consistent and comparable, making them useful for investors and other users of financial information.
There are four main types of GAAP: general standards, industry-specific standards, company-specific standards, and international standards. General standards are the most basic level of GAAP, and they apply to all businesses. Industry-specific standards are designed for businesses in specific industries, such as banking or healthcare. Company-specific standards are created by a company for its own internal use. International standards are created by global organizations, such as the International Accounting Standards Board (IASB), and they typically take precedence over other types of GAAP.
