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    GAAP

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    gelli joy corpuz
    Generally Accepted Accounting Principles (GAAP) were established in response to the 1929 stock market crash and Great Depression. GAAP began with legislation in the 1930s and have gradually evolved based on concepts, standards and best practices. GAAP refers to the rules and standards used to prepare financial statements issued outside a company, based on established concepts and objectives to guide financial statement preparation and presentation. The Philippine Financial Reporting Standards are the new set of GAAP in the Philippines issued by the Accounting Standards Council to govern financial statements.

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    GAAP

    Uploaded by

    gelli joy corpuz
    261 views9 pages
    Generally Accepted Accounting Principles (GAAP) were established in response to the 1929 stock market crash and Great Depression. GAAP began with legislation in the 1930s and have gradually evolved based on concepts, standards and best practices. GAAP refers to the rules and standards used to prepare financial statements issued outside a company, based on established concepts and objectives to guide financial statement preparation and presentation. The Philippine Financial Reporting Standards are the new set of GAAP in the Philippines issued by the Accounting Standards Council to govern financial statements.

    Original Description:

    HISTORY of Generally Accepted Acccounting Principle

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    Generally Accepted Accounting Principles (GAAP) were established in response to the 1929 stock market crash and Great Depression. GAAP began with legislation in the 1930s and have gradually evolved based on concepts, standards and best practices. GAAP refers to the rules and standards used to prepare financial statements issued outside a company, based on established concepts and objectives to guide financial statement preparation and presentation. The Philippine Financial Reporting Standards are the new set of GAAP in the Philippines issued by the Accounting Standards Council to govern financial statements.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    261 views9 pages

    GAAP

    Uploaded by

    gelli joy corpuz
    Generally Accepted Accounting Principles (GAAP) were established in response to the 1929 stock market crash and Great Depression. GAAP began with legislation in the 1930s and have gradually evolved based on concepts, standards and best practices. GAAP refers to the rules and standards used to prepare financial statements issued outside a company, based on established concepts and objectives to guide financial statement preparation and presentation. The Philippine Financial Reporting Standards are the new set of GAAP in the Philippines issued by the Accounting Standards Council to govern financial statements.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 9
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    The key takeaways are that Generally Accepted Accounting Principles (GAAP) were established in response to the stock market crash of 1929 and regulate how financial statements are prepared and presented. GAAP has evolved over time based on concepts, standards and best practices accepted across industries.

    The criteria for general acceptance of an accounting principle are that it must be relevant, objective and feasible. It must result in meaningful and useful information that is not influenced by personal bias and can be implemented without undue complexity or cost.

    Some basic principles of accounting include the objective principle, historical cost, revenue recognition, expense recognition, adequate disclosure, materiality, consistency and comparability.

    History

     Generally Accepted Accounting Principles were


    eventually established primarily as a response to
    the Stock Market Crash of 1929 and the
    subsequent Great Depression
     Generally Accepted Accounting Principles began
    to be established with legislation such as
    the Securities Act of 1933 and the Securities
    Exchange Act of 1934.
     The GAAP have gradually evolved, based on
    established concepts and standards, as well as on
    best practices that have come to be commonly
    accepted across different industries.
    GAAP(Generally Accepted Accounting Principles)
     is referring to a set of rules, standards and
    practices used throughout the accounting industry
    to prepare and standardize financial statements
    that are issued outside the company.
     is based on established concepts, objectives,
    standards and conventions that have evolved over
    time to guide how financial statements are
    prepared and presented.
     Philippine Financial Reporting Standards
    (PFRS)/Philippine Accounting Standards
    (PAS)
    - are the new set of Philippine
    Generally Accepted Accounting Principles
    (GAAP) issued by the Accounting
    Standards Council (ASC) to govern the
    preparation of financial statements.
    Criteria for General Acceptance
    of an Accounting Principle
     Relevance – it results in information that is
    meaningful and useful to those who need
    to know something about a certain
    organization.
     Objectivity – the resulting information is
    not influenced by the personal bias or
    judgment of those who furnish it.
     Feasibility – it can be implemented
    without undue complexity or cost.
    Basic Principles
     Objectivity Principle - Accounting records and
    statements are based on the most reliable data
    available so that they will be as accurate and as
    useful as possible.
     Historical Cost – this principle states that acquired
    assets should be recorded at their actual cost.
     Revenue Recognition Principle – revenue is to be
    recognized in the accounting period when goods
    are delivered or services are rendered or
    performed.
     Expense Recognition Principle – Expenses should
    be recognized in the accounting period when
    goods and services are used up to produce
    revenue.
     Adequate Disclosure –requires that all relevant
    information that would affect the user’s
    understanding and assessment of the accounting
    entity be disclosed in the financial statements
     Materiality – Financial reporting is only concerned
    with information that is significant enough to affect
    evaluations and decisions.
     Consistency Principle – the firms should use the
    same accounting method from period to period
    to achieve comparability over time within a single
    enterprise.
    Fundamental Concepts
     EntityConcept - The business is separate from its
    owners and other businesses.
     Monetary Unit Concept - the Philippine peso is a
    reasonable unit of measure and that its purchasing
    power is relatively stable.
     Periodicity Concept - The economic activities of
    an enterprise can be divided into equal time
    periods for reporting purposes.
     Going concern - an entity is viewed as continuing
    in business for the foreseeable future.
    Qualities of GAAP

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