Tuesday, May 22, 2012
what is GAAP?
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GAAP stands for Generally Accepted Accounting Principles or Prinsif-prinsif Financial Accounting Standards. GAAP is a broad group of accounting standards and general industrial use have been developed over the years, and are used by businesses to properly manage their financial information into the accounting records and summarized into financial statements, and disclose certain supporting information.
One reason for the use of GAAP is to get people to read some of the company's financial statements have a reasonable basis for comparison, because all the companies using GAAP financial statements have been made using the same rules.which include the composition of GAAP, namely:A. Financial statements2. Assets3. Obligation4. Justice5. Revenue6. Load7. Merger8. Derivatives and hedging9. The fair value10. Foreign currency11. Lease12. Non-monetary transactions13. Events after the balance sheet date
Specialized industry accounting, such as airlines, extractive activities, and health care from the GAAP statements of a series of government-sponsored entity accounting, in which the Financial Accounting Standards Board (FASB) is the latest. Securities and Exchange Commission also issues a statement through the accounting staff Accounting Bulletin and other announcements are only applicable to publicly held companies, and are considered part of GAAP. Codified into the GAAP Accounting Standards Codification (ASC), which is available online and (more legible) in printed form.
GAAP is used mainly by companies report their financial results in the United States. International Financial Reporting Standards, or IFRS, the accounting framework used in most countries. GAAP is much more than the rules of the IFRS-based. IFRS focuses more on general principles of GAAP, IFRS work that makes a much smaller, cleaner, and easier to understand than GAAP.
There are several working groups that gradually reduces the difference between GAAP and IFRS accounting framework, so that eventually there should be little difference in the reported results of a business if the switch between the two frameworks.
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