What is US GAAP?

US GAAP: Generally Accepted Accounting. . . What Is GAAP? Generally Accepted Accounting Principles (GAAP or US GAAP) are a collection of commonly-followed accounting rules and standards for financial reporting.

What are the specifications of GAAP?

The specifications of GAAP, which is the standard adopted by the U.S. Securities and Exchange Commission (SEC), include definitions of concepts and principles, as well as industry-specific rules. The purpose of GAAP is to ensure that financial reporting is transparent and consistent from one organization to another.

What are non-GAAP financial measures?

Financial Definition of GAAP. These details can be found in such places as quarterly balance sheets or income statements, 10-Q filings, or annual reports. Examples of non-GAAP measures include net earnings, gross income, and net cash provided by operating activities.

Why is GAAP important for non-profits and governmental entities?

GAAP also seeks to make non-profit and governmental entities more accountable by requiring them to clearly and honestly report their finances. In short, GAAP is designed to ensure a consistent presentation of financial statements, making it easier for people to read and comprehend the information contained in the statements.