Generally Accepted Accounting Principles, a.k.a. GAAP, are a set of commonly used accounting rules and guidelines that govern the reporting standards for various types of financial reports and accounting transactions for companies raising money and going public in the United States. GAAP differs slightly from International Financial Reporting Standards, a.k.a., IFRS, which is used in most international markets.
Generally Accepted Accounting Principles Explained
GAAP, which are established by the Financial Accounting Standards Boards and adopted by the U.S. Securities and Exchange Commission, help to create a level of standardization as more companies choose to raise money and go public in the United States. With more and more corporations ranging from technology innovators to cannabis producers operating across multiple countries, standardized accounting rules like GAAP create stability, integrity, and trust for lenders, investors, and other stakeholders in the U.S. equity markets and beyond.
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