By Leanna Kelly When a public company issues a financial statement, everything needs to be clear and well-understood by everyone reading it. To ensure this, it’s paramount to have a baseline for reporting. That’s where Generally Accepted Accounting Principles (GAAP) come in. GAAP represents methods, rules and practices that provide guidelines and procedures—as well as objective standards—for financial data and statements. In short: GAAP standardizes accounting for all companies, so the data they’re reporting is universally understood and cross-comparable.
GAAP-compliance is a major implication for companies reporting financial information to shareholders. It’s mandated by the Securities and Exchange Commission (SEC) for all public …read more
