GAAP
Financial reporting framework
GAAP stands for Generally Accepted Accounting Principles—the standard framework of rules and conventions for financial reporting in the United States.
Companies follow GAAP so their financial statements can be compared meaningfully: The audit found several departures from GAAP.
Public companies must report according to GAAP; private ones often do too.
Outside the U.S., most countries follow IFRS instead.
Maintaining financial records
- principlesFoundational moral beliefs
- frameworkUnderlying support system
- codificationOrganizing rules into system
- pronouncementsFormal authoritative statements
guidance · rules · conventions · hierarchy · authoritative · SEC · amendments · interpretations
Act of revealing information
- presentationFormal display to viewers
- footnotesMarginal citations below text
- materialityState of being consequential
- transparencyState of being see-through
comparability · consistency · recognition · measurement · consolidation · quarterly · annual · 10-K
Examining records for accuracy
- attestationFormal declaration confirming truth
- assuranceFirm promise or certainty
- verificationProving something accurate
- opinionSubjective personal belief
restatement · non-compliance · violations · enforcement · penalties · review · examination · accuracy
Incremental addition over time
- matchingIdentical in appearance
- conservatismPreference for existing institutions
- relevanceState of mattering here
- reliabilityConsistent, predictable performance
accounting
Maintaining financial records
- principlesFoundational moral beliefs
- frameworkUnderlying support system
- codificationOrganizing rules into system
pronouncements · guidance · rules · conventions · hierarchy · authoritative · SEC · amendments · interpretations · updates
disclosure
Act of revealing information
- presentationFormal display to viewers
- footnotesMarginal citations below text
- materialityState of being consequential
transparency · comparability · consistency · recognition · measurement · consolidation · quarterly · annual · 10-K
auditing
Examining records for accuracy
- attestationFormal declaration confirming truth
- assuranceFirm promise or certainty
- verificationProving something accurate
opinion · restatement · non-compliance · violations · enforcement · penalties · review · examination · accuracy · certification
accrual
Incremental addition over time
- matchingIdentical in appearance
- conservatismPreference for existing institutions
- relevanceState of mattering here
reliability · neutrality · timeliness · understandability · periodicity
- financebank, CFO, banks, controller, finance
- financial termswealth, asset, currency, balance sheet, audit
- business accountingaccounts payable, accountant, accounts receivable, accounts, accrual
- Business AcronymsSKU, UPC, CEO, COO, POS
- auditingauditor, audit trail, audit trails, auditors, audit report
- corporate taxcorporate tax, corporation tax, corporate taxation, taxable income, tax liability
Misleading financial reporting