generally accepted accounting principles gaap

GAAP or Generally Accepted Accounting Principles: Means the standards for accounting and preparation of financial statements established by the Federal Accounting Standards Advisory Board (or its successor agency) or any successor standards adopted pursuant to relevant Securities Exchange Commission rule. Other legislation applies to financial institutions and certain other types of reporting entity.GAAP or Generally Accepted Accounting Principles means (a) when used in Section 6.08, whether directly or indirectly through reference to a capitalized term used therein, means (i) principles that are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and (ii) to the extent consistent with such principles, the accounting practice of the Parent reflected in its financial statements for the year ended on the Balance Sheet Date, and (b) when used in general, other than as provided above, means principles that are (i) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time, and (ii) consistently applied with past financial statements of the Parent adopting the same principles, provided that in each case referred to in this definition of “GAAP” a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification regarding changes in GAAP) as to financial statements in which such principles have been properly applied.Įxamples of GAAP or Generally Accepted Accounting Principles in a sentence The Canada Business Corporations Act and provincial corporations and securities legislation generally require companies to prepare financial statements for their shareholders in accordance with GAAP as set out in the CPA Canada Handbook – Accounting. Separate accounting standards exist for pension plans.Īccounting standards adopted by the AcSB (including IFRS Standards) are published in the CPA Canada Handbook – Accounting. Private enterprises and not-for-profit organizations can choose to use separately developed standards for those entities or IFRS Standards. The AcSB adopted IFRS ® Standards as the accounting standards used by publicly accountable enterprises.

In Canada, accounting standards for all entities outside the public sector are issued by the Accounting Standards Board (AcSB). Their objective is to provide financial information to investors, lenders, creditors, contributors, and others that is useful in making decisions about providing resources to the entity. Accounting standards are authoritative standards for financial reporting and are the primary source of generally accepted accounting principles (GAAP).Īccounting standards specify how transactions and other events are to be recognized, measured, presented and disclosed in financial statements.

Generally accepted accounting principles gaap