What is GAAP?

Generally Accepted Accounting Principles (GAAP) are a set of standardized guidelines and principles for financial accounting in the United States. They provide a framework for how financial statements should be prepared and presented, and outline the specific rules and procedures that companies must follow when recording and reporting their financial transactions.

GAAP are issued by the Financial Accounting Standards Board (FASB), which is an independent organization responsible for setting accounting standards in the United States. They are followed by public companies, as well as many private companies and nonprofit organizations.

The main purpose of GAAP is to ensure that financial statements are transparent, comparable, and reliable, so that investors and other stakeholders can make informed decisions based on the company's financial performance.