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Sticking to accountancy guidelines can be quite difficult. However, they’re there to ensure businesses follow the same rules and get, broadly, the same treatment. For a lot of business owners and even beginner accountants, however, GAAP may seem strange. Moreover, they don’t know too much about it. This is especially the case when you look at its relationship with more complex accounting such as operating leases and the like.
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So let’s explore US GAAP by looking at its key principles and intricacies, along with tips for sticking to it.
What Is GAAP?
GAAP stands for generally accepted accounting practice (or generally accepted financial practices). The Securities and Exchange Commission (SEC) has adopted GAAP as the standard governing accountancy. These guidelines include accounting principles and definitions of concepts. It also includes industry-specific rules.
What Is the Main Purpose of These Guidelines?
The …