Full disclosure: Companies following US GAAP must provide comprehensive and meaningful information in their financial statements and related notes to ensure transparency.Historical cost: The historical cost principle is a fundamental concept in US GAAP, stating that assets and liabilities should be recorded at their original cost.Accrual basis: US GAAP is based on accrual accounting, where revenues and expenses are recognized when earned or incurred, regardless of when cash is received or paid.Principles-based approach: US GAAP generally relies on broad principles rather than specific rules, allowing for professional judgment and flexibility in applying these principles to various transactions and events.Hierarchy: US GAAP follows a hierarchical structure that categorizes the various sources of accounting principles, giving preference to authoritative standards issued by the FASB.The key aspects and characteristics of US GAAP include: The FASB is responsible for issuing accounting standards and updates, which are collectively known as Generally Accepted Accounting principles. US GAAP is primarily established and governed by the Financial Accounting Standards Board (FASB), an independent private-sector body. These principles provide a standardized framework for how companies should prepare and present their financial statements, ensuring consistency, comparability, and transparency in financial reporting. US GAAP, which stands for Generally Accepted Accounting Principles, is a set of accounting standards and principles used in the United States for financial reporting. So, Let’s embark on this enlightening expedition into the realm of US GAAP together! Welcome to the perfect starting point for your US GAAP journey! If you are new to the world of Generally Accepted Accounting Principles, fear not as in this blog we will take you from the very basics of US GAAP, ensuring a solid foundation for your understanding.
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