General Accepted Accounting Principles (GAAP)

Generally Accepted Accounting Principles (GAAP) are a set of rules and guidelines that govern how financial statements are prepared and presented in the U.S. They ensure consistency, transparency, and fairness in financial reporting, making it easier for investors, regulators, and other stakeholders to understand a company's financial health. GAAP covers various aspects, including revenue recognition, asset valuation, and expense reporting, providing a standardized framework that helps ensure that financial information is reliable and comparable across different organizations. This framework ultimately helps maintain trust in the financial markets.