![]() Principle of sincerity: Accountants should perform and report with basic honesty and accuracy.Principle of regularity: This principle means that all accountants are to consistently abide by the GAAP.Principle of prudence: All reporting of financial data is to be factual, reasonable, and not speculative.In other words, it should not compensate (offset) a debt with an asset. Principle of non- compensation: This principle states that all aspects of an organization’s performance, whether positive or negative, are to be reported.Principle of permanent methods: Closely related to the previous principle is that of consistent procedures and practices being applied in accounting and financial reporting to allow comparison.Principle of consistency: This principle ensures that consistent standards are followed in financial reporting from period to period. ![]() ![]() GAAP is set forth in 10 primary principles, as follows: The IFRS rules govern accounting standards in the European Union, as well as in a number of countries in South America and Asia. In addition, or as an alternative, are the International Financial Reporting Standards (IFRS) established by the International Accounting Standards Board (IASB). US securities law requires all publicly-traded companies, as well as any company that publicly releases financial statements, to follow the GAAP principles and procedures. The US GAAP is a comprehensive set of accounting practices that were developed jointly by the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB), so they are applied to governmental and non-profit accounting as well. ![]() GAAP, or Generally Accepted Accounting Principles, is a commonly recognized set of rules and procedures designed to govern corporate accounting and financial reporting in the United States (US). ![]()
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