Business, Legal & Accounting Glossary

Definition: GAAP

Quick Summary of GAAP

Generally Accepted Accounting Principles are the rules, conventions and standards that set out accounting practices for US companies, established by the Financial Accounting Standard Board.

What is the dictionary definition of GAAP?

Dictionary Definition

a collection of rules and procedures and conventions that define accepted accounting practice; includes broad guidelines as well as detailed procedures.

Full Definition of GAAP

GAAP – Generally Accepted Accounting Principles – are a collection of guidelines and practices used by the accounting community.

In the US, GAAP standards are set by the Financial Accounting Standards Board (FASB). FASB continually updates GAAP as new accounting issues and concerns arise. Outside the US, the equivalent of GAAP is IAS – International Accounting Standards – which is maintained by the International Accounting Standards Board.

Financial statements submitted to the SEC by publicly-traded companies are required to meet GAAP standards. When comparing financial statements from different years, it is important to note any changes in GAAP over the intervening period. Since GAAP is only a set of guidelines, it cannot guarantee financial statements are not fraudulent. If company management provides the auditing firm with incorrect data, the resulting financial statements may be GAAP compliant yet still incorrect.

Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
GAAP. Payroll & Accounting Heaven Ltd. September 18, 2021
Chicago Manual of Style (CMS):
GAAP. Payroll & Accounting Heaven Ltd. (accessed: September 18, 2021).
American Psychological Association (APA):
GAAP. Retrieved September 18, 2021, from website:

Definition Sources

Definitions for GAAP are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 26th April, 2020 | 7 Views.