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Source URL:: https://www.investopedia.com/terms/g/gaap.asp
Topics:: #business
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# GAAP: Understanding It and the 10 Key Principles
GAAP is a common set of generally accepted accounting principles, standards, and procedures. U.S. public companies must follow GAAP for their financial statements.
## Highlights
> [!info]+ Updated on 051022_090712
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> GAAP is the set of accounting rules set forth by the FASB that U.S. companies must follow when putting together financial statements.
>GAAP aims to improve the clarity, consistency, and comparability of the communication of financial information.
>GAAP may be contrasted with pro forma accounting, which is a non-GAAP financial reporting method.
>The ultimate goal of GAAP is to ensure a company's financial statements are complete, consistent, and comparable.
>GAAP is used mainly in the U.S., while most other jurisdictions use the IFRS standards.
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