Define the concept 'Accounting Principles'
accounting principles.
Answers
Generally Accepted Accounting Principles is the accounting standard adopted by the U.S. Securities and Exchange Commission.
Accounting Principals
Accounting principles are the rules and guidelines that companies must follow when reporting financial data. The Financial Accounting Standards Board (FASB) issues a standardized set of accounting principles in the U.S. referred to as generally accepted accounting principles (GAAP).
Some of the most fundamental accounting principles include the following:
Accrual principle
Conservatism principle
Consistency principle
Cost principle
Economic entity principle
Full disclosure principle
Going concern principle
Matching principle
Materiality principle
Monetary unit principle
Reliability principle
Revenue recognition principle
Time period principle
Accrual principle
Conservatism principle
Consistency principle
Cost principle
Economic entity principle
Full disclosure principle
Going concern principle
Matching principle
Materiality principle
Monetary unit principle
Reliability principle
Revenue recognition principle
Time period principle
WHY?
Accounting standards are implemented to improve the quality of financial information reported by companies.
In the United States, the Financial Accounting Standards Board (FASB) issues Generally Accepted Accounting Principles (GAAP).
GAAP is required for all publicly traded companies in the U.S.; it is also routinely implemented by non-publicly traded companies as well.
Internationally, the International Accounting Standards Board (IASB) issues International Financial Reporting Standards (IFRS).
The FASB and IASB sometimes work together to issue joint standards on hot-topic issues, but there is no intention for the U.S. to switch to IFRS in the foreseeable future.
Hope that helps!