The Importance of Generally Accepted Accounting Principles (GAAP)

The Importance of GAAP

Why do we need Generally Accepted Accounting Principles (GAAP)? This short video provides the answer for those who are new to the work of the FAF, the FASB, and the GASB.
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About GAAP

Financial reporting (balance sheets, income statements, financial notes, and disclosures) is the language we use to communicate information about the financial condition of a company, a not-for-profit, or a state or local government. Generally Accepted Accounting Principles (GAAP) are the rules that determine how that language is written.
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GAAP & Public Companies

Capital markets depend on companies being able to supply the market with high-quality financial information to enable investors to make better decisions.
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  • The Importance of GAAP
  • About GAAP
  • GAAP & Public Companies

About GAAP



Financial reporting (balance sheets, income statements, financial notes, and disclosures) is the language we use to communicate information about the financial condition of a company, a not-for-profit, or a state or local government.
>> More


GAAP and Public Companies



Capital markets depend on companies being able to supply the market with high-quality financial information to enable investors to make better decisions.
>> More

GAAP & and Private Companies



Many private companies, especially those seeking to get loans, expand their business, or considering going public, make the decision to use GAAP-based financial reporting.
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GAAP & Not-for-Profits



Not-for-profit organizations often find that there are many advantages to using GAAP—especially those seeking to expand their capacity to provide services.
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GAAP & & State and Local Governments



Preparing a financial report in compliance with GAAP establishes greater accountability and transparency between a state or local government and its citizens, legislative and oversight bodies, investors, and creditors.
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The Importance of GAAP



Why do we need Generally Accepted Accounting Principles (GAAP)? This short video provides the answer for those who are new to the work of the FAF, the FASB, and the GASB.
>> Play Video


GAAP Related Videos

Interview series highlighting the importance of GAAP from the perspective of experts.



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