GAAP & FRAMEWORK

• The practice of accounting is grounded by rules and procedures called Generally Accepted Accounting Principles (GAAP).
• By "generally accepted," GAAP is adopted by all business entities and mandated by various authorities and accounting organizations world wide.
• The role of International Accounting Standards Committee (IASC) is to narrow the differences between entities by harmonizing the accounting principles and procedures. They identify what are considered as GAAP.
• Framework sets out the concepts that underlie the preparation and presentation of financial statement. It outlines the general guidelines, assumptions, and principles on the financial statements and how items should be presented.
• General Purpose Financial Statements are set of financial statements which intends to serve the needs of the different users.
• The Scope of the Framework:

  • Objectives of the financial statement
  • Qualitative Characteristics (usefulness of info)
  • Definition, Recognition, and Measurement of Elements
  • Concept of Capital and Capital Maintenance