US GAAP Accounting Standards Advisory Services
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What is GAAP?
Generally Accepted Accounting Principles is a collection of commonly-followed accounting regulation and standards for financial reporting. (GAAP) generally accepted accounting principles is basically a collection of standards and rules that are appropriate and practiced in the accounting industry.
GAAP holds a set of accounting principles, and procedures that accountants and accounting enterprises must follow. The main goal of GAAP is to make sure that financial reporting is clear and consistent from one enterprise to another.
GAAP covers a wide range of topics such as financial statement presentation, liabilities, assets, equities, expenses and revenues, business combinations, foreign currency, derivatives and hedging and non-monetary transactions.
GAAP affects the following activities:
- Measuring economic activity
- Reveal data about an activity
- Sum up and prepare economic information
- Reporting measurements at regular intervals
Importance of GAAP
GAAP is essential because it assists maintain confidence in the financial markets. If not for GAAP, shareholders would be more unwilling to trust the information presented to them by enterprises because they would have less trust in its integrity. Without that trust, we might see fewer transactions, likely leading to higher transaction prices and a less robust economy. GAAP also assists shareholders analyze business by making it simpler to perform “apples to apples” comparisons between one company and another.
How to Comply with GAAP in the US
Many business holders in the US have heard the accounting term “GAAP” but don’t really find out what it means to their business. Basically, GAAP is the standard for some US firms and these firms have to follow GAAP to report their financial information.
(GAAP) “Generally accepted accounting principles,” basically a collection of standards and conventions used by the U.S. accounting community for reporting financial details. The American Institute of CPAs decides on the standards that make up GAAP regulations.
All publicly listed companies are instructed by federal and state securities regulations to report their financial records in accordance with GAAP standards. Banks and other collaborators may also require privately listed enterprises to report their financial statements in accordance with GAAP. Stakeholders can include clients who depend heavily on a business for services or supplies, federal agencies that may award your company agreements, and other parties that have an interest in doing business with you. If you are thinking about to sell your business then you should follow GAAP-prepared financials, even if you are not required to, because it will increased your company’s value/worth.
The most obvious way to assure your financial statements complies with GAAP, or “US GAAP accounting,” is to appoint a professional public accountant. A professional accountant can assist you build up your accounting system to securely sum up assets, liabilities, expenses and incomes. Generally, printing an earnings report or balance sheet from your US accounting software .However, if you give a well set of internally prepared books to your accountant; then he/she can make the important modifications to make them GAAP-compliant.
Normally, Banks and other stakeholders need GAAP-formatted financial details at the end of the financial year, but it is commonly not essential to pay for audited financial statements. There are three kinds of financial statements accepted by the AICPA, each with a higher degree of guarantee from your certified accountant.
US GAAP Financial Statements & Reporting Services
US GAAP accounting makes financial statements and reporting standardized and transparent, using commonly accepted terms, procedures and rules. The consistency of presentation of financial statements that results from GAAP and makes it easy for US shareholders and other interested parties (such as a management board and directors of the company) to more easily understand financial statements and reporting.
In short, US GAAP accounting is introduced to assure a consistent presentation of financial statements, making it simple for people to read and understand the information contained in the statements.
The main goal of US GAAP accounting is to assure a company’s financial statements are complete, consistent, and comparable. This makes it easier for shareholders to evaluate and extract useful details from the company’s financial statements, including trend data over a period of time. US GAAP standards also ease the comparison of financial data across different companies.
Financial Statements & Reporting Services
Nowadays, managing financial statements and reporting services in the US becoming difficult and worrisome. Many US companies finance teams and put their concentration on boosting and demonstrating value over time. They are anxious to move away from non-core, transactional, manual, and repetitive jobs, so they can leverage their skills to give the dynamic insights required to enhance decision making, drive growth and realize the latest sources of revenue.
Professional certified experts can assist companies in accomplishing these goals while remaining compliant with all company regulatory needs. Experts are here to assist you tackle the consequences of falling foul of difficult local rules without having to hire an internal costly resource on the ground. Certified accountants can eliminate the frustration, stress caused by the manual processing of data, mismatches between central systems and local compliance requirements.
How does US Accounting Differ from International Accounting?
Any United States (U.S.) enterprise that works in the global economy should comprehend the differences between international accounting practices and U.S accounting. Companies throughout the world have the same need to account for their liabilities, assets revenues and expenditures so that potential stakeholder’s, lenders can correctly assess the financial health of the enterprise. Although, these businesses normally perform accounting duties in different ways because they use their own unique set of accounting standards.
U.S. businesses accompany the Generally Accepted Accounting Principles (GAAP), and other countries have their own accounting standards that normally accept input from a body of global accounting standards.
The international accounting is a set of standards made by the International Accounting Standards Board (IASB). The international accounting administers how enterprises around the world prepare their financial statements. Unlike the US accounting, the international accounting does not dictate precisely how the financial statements should be made but only gives guidelines that adjust the standards and make the accounting process uniform globally.
Both individual and corporate stakeholders can examine a company’s financial statements and make an informed decision on whether to spend in the company. The international accounting is used in the European Union, South America, and some parts of Asia and Africa.
US Accounting (GAAP)
The US GAAP accounting is a set of principles that organization in the United States must comply with when preparing their annual financial statements. The measures take an authoritative approach to the accounting process so that there will be minimum or no inconsistency in the financial statements submitted by public companies to the US Securities and Exchange Commission (SEC). It allows shareholders to make cross-comparisons of financial statements of numerous publicly-traded companies in order to make an educated decision regarding investments.
Frequently Asked Questions
We have customers from both US and UK and hence our Bookkeepers are well versed with both US and US Generally Accepted Accounting Practices.
Every country has their own GAAP which helps Businesses to maintain their Books according to their Industry specific categorization and hence it reflects the correct taxes in the filings.
No that’s not true. That’s the reason understanding of GAAP is very important and not everyone is well versed with it. So better choose an expert than creating mess in the books which might attract heavy Tax charges.