GAAP: Western Standards of US Accounting
GAAP are generally accepted Western standards of accounting and reporting, used in the U.S. and certain other countries. From English – General Accepted Accounting Principles (GAAP). GAAP standards regulate accounting treatment of certain practical situations in detail. Generally Accepted Accounting principles developed in the U.S. for independent accounting firms in an attempt to eliminate inconsistency in accounting for private companies and corporations.
International system of accounting represents widely used accounting standards developed by the Council of Financial Accounting Standards Board. They are used to standardize financial accounting of joint-stock companies. Common accounting principles (or GAAP) are “basic rules” of financial reporting. These principles provide general framework that defines information to be included in the report and the way this information should be presented. Phrase “generally accepted accounting principles” includes basic objectives of financial report, a number of concepts and a set of detailed rules.
It must be emphasized there is no complete list of generally accepted accounting principles. In fact, new accounting principles appear continuously, as firms engage in new forms of business activity.
GAAP are based on a much larger number of developments. Therefore, American standards show a tendency to clearer regulation of all operations and less flexibility for individual company. The U.S. Board of Financial Reporting Standards signed an agreement with the Committee on International Financial Reporting Standards to eliminate differences between U.S. and international reporting systems. U.S. standards are used by many foreign companies to enter the U.S. market.
Domestic market GAAP programs appeared not so long ago. And, accordingly, there appeared different training GAAP programs. Most of them include the following stages:
1. Introduction to international accounting standards and reporting
2. Records in accordance with the concepts and standards of GAAP USA (Summaries & Status of FASB Statements – SFAS)
3. Records in accordance with the concepts and standards of GAAP UK (Summaries & Status of FRS Statements – SSAP).
4. Differences in national financial reporting requirements of international accounting standards IFRS – IAS.
In future, knowledge obtained at GAAP courses allow graduates conducting independent accounting and reporting of joint ventures and firms, filling out accounting forms, composing and protecting balance sheet.
Upon completion of GAAP training courses, graduates receive a standard certificate and can be employed in international financial institutions and joint business firms and companies in positions “GAAP, IAS accountant”, “leading GAAP, IAS accountant assistant”.
What else makes the whole book world reckoning with the US GAAP? Of course, this is carefully considered structure and depth of standards themselves. They are considered the most detailed guidance for virtually all industries, as well as accounting and reporting cycles.