Generally Accepted Accounting Principles (GAAP)

Posted On // Leave a Comment
GAAP are the foundation, and ground rules of accounting practice. GAAP are followed by accountants all over the world.

Definition of GAAP: The accounting profession has developed a common set of standards that are generally accepted and universally practiced. This common set of standards is called generally accepted accounting principles (GAAP).

Famous Definitions of GAAP:
(1)    According to Ahmed Belkaoui, one of the five best accountants in the world, 'GAAP are those principles that guide accounting practice.'    :
(2)    According to Eric Louis Kohler, another one of the five best accountants in the world. 'GAAP are the general rules followed by accountants.'
(3)    According to the International Accounting Standards Committee, 'GAAP are the standards that indicate how to report economic events.'
(4)    According to the AICPA, 'GAAP are the constitution for accountants and the canons of their art.

A List of GAAP-.
The first GAAP in the world provided by Luca Pacioli is:
(1)    Dual Aspect Concept,
12 most popular GAAP provided by FASB are:
(2)    Separate/Economic Entity Assumption,
(3)    Going Concern Assumption,
(4)    Monetary Unit Assumption,
(5)    Periodicity Assumption,
(6)    Historical Cost Principle,
(7)    Revenue Recognition Principle,
(8)    Matching Principle,
(9)    Full Disclosure Principle, Cost-Benefit
(10)    Relationship Constraint,
(11)    Materiality Constraint.
(12)    Industry Practice Constraint,
(13)    Conservatism Constraint,

Other GAAP (or accounting qualities) stated by FASB are:
(14)    Relevance Principle,
(15)    Predictive Value Principle,
(16)    Feedback Value Principle,
(17)    Timeliness Principle,
(18)    Reliability Principle,
(19)    Verifiability Principle,
(20)    Representational Faithfulness Principle,
(21)    Neutrality Principle,

Related post


Post a Comment

Total Pageviews