# Metadata Source URL:: https://www.investopedia.com/terms/g/gaap.asp Topics:: #business --- # 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 > > 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. >0 seconds of 1 minute, 43 secondsVolume 75%