standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. GAAP derive, in order of importance, from: (1) issuances from an authoritative body designated by the AICPA Council (for example, the FASB Statements, AICPA APB Opinions, and AICPA Accounting Research Bulletins); (2) other AICPA issuances such as AICPA Industry Guides; (3) industry practice; and (4) accounting literature in the form of books and articles. Principles also derive from tradition, such as the concept of matching. In the audit report, the CPA must indicate that the client has followed GAAP on a consistent basis.
accounting rules and conventions defining acceptable practices in preparing financial statements. The Financial Accounting Standards Board (FASB), an independent self-regulatory organization, is the primary source of accounting rules followed by auditors and certified public accountants. The aim of GAAP accounting principles is uniformity in financial statements.
conventions, rules, and procedures that define accepted accounting practice, including broad guidelines as well as detailed procedures.
conventions, rules, and procedures that define accepted accounting practice, including broad guidelines as well as detailed procedures. The basic doctrine was set forth by the Accounting Principles Board of the American Institute of Certified Public Accountants, which was superseded in 1973 by the Financial Accounting Standards Board (FASB), an independent self-regulatory organization.
type of accounting method, in life insurance, designed to match revenues and expenses of an insurer according to principles designed by the Financial Accounting Standards Board and the Audit Guide for Stock Life Insurance Companies published by the American Institute of CPAs. For example, under GAAP, acquisition expenses (costs of placing insurance on a company's books such as administrative expenses and agent commissions) are recognized in the same proportion that premium income is recognized over the premium paying period, with losses subtracted from premium and investment income as they occur.
the set of rules considered standard and acceptable by Certified Public Accountants.
Example: Accounting deductions are required for real estate depreciation, even for assets that rise in value.
