Definition

US GAAP

US GAAP, or Generally Accepted Accounting Principles, is the body of accounting rules that companies in the United States follow when they prepare financial statements. The Financial Accounting Standards Board maintains it, and the SEC requires public companies to report under it. GAAP tends to be rule-based, spelling out detailed guidance for specific situations, which brings consistency but also complexity. It governs how a company recognizes revenue, values inventory, accounts for leases, and much more. When a US business raises capital, gets audited, or sells to a larger buyer, its books almost always need to speak GAAP so that outside parties can compare and trust the numbers.