On the GAAP

While many companies that accountants are bound by generally accepted accounting practices and that they are are inviolate, nothing could be further from the truth. Everything is subject to interpretation and GAAP are not different. For one thing, GAAP for accounting methods to be used for certain expenses and revenues in some specialized companies. Other hand, methods of GAAP require that decisions made about timing of recipes for registration and expenses, or they need that key to be quantified. Decide on the chronology of the revenue and expenditure and accurate values on these factors require judgments, estimates and interpretations.

GAAP mission over the years has been to standardize accounting methods to provide consistency across all businesses. But alternative methods are always allowed to some basic business expenses. No test is required to determine whether a method is preferable to another.A company is free to choose any method that it veut.Mais must choose which costs cost sold good method to use and what cost amortization method to use.

Other expenses and sales revenue accounting method has been established. There are no alternative methods.However, a company has quite latitude to really to implement enterprise méthodes.Une applies accounting conservatively and another company applies methods more liberally.The end result is more diversity among companies in their measure of profit and financial statements that could be expected, given that GAAP have evolved since 1930.

Delivered on GAAP prepared by the Financial Accounting Standards Board (FASB) is now more than 1000 pages longues.Et who does not even understand the rules and regulations issued by the federal regulator that jurisdiction over financial reporting and accounting of public companies - the Securities and Exchange Commission (SEC) methods.