US GAAP Accounting Homework Help
Generally Accepted Accounting Principles can also be defined as GAAP or US GAAP. US GAAP is a set of generally accepted accounting principles adopted by U.S. Securities and Exchange Commission (SEC). While the SEC has said that it wants to move away from US GAAP to the International Financial Reporting Standards (IFRS). But international financial reporting standards are considerably different from GAAP and their progress has been slow and uncertain. The Financial Accounting Standards Board (FASB) has published US GAAP in Extensible Business Reporting Language (XBRL) beginning in 2008.
Here are some objectives of US GAAP
At the time of the establishment of GAAP, FASB was mainly focused on the end users of financial statements.Who are the end users according to US GAAP? End users are the people such as investors, banks, lenders.They use third party financial statements to assess business decisions. FASB wants to make stable standards that can help end users to understand and use a business organizations financial data. US GAAP's objective is not to help business companies. It is intended to help an end user.All of the objectives that FASB and the prior accounting standard setting bodies can be described as one main objective that is to make financial statements universally understandable and useful for all of their users. You should remember that US GAAP only has to be used by private companies those distribute financial statements. So, a company that is not distributing financial statements does not have to use US GAAP.
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