What does GAAP stand for in accounting?

GAAP stands for Generally Accepted Accounting Principles in accounting.

GAAP is a framework of recognized accounting principles, rules, conventions, and procedures used to prepare financial statements. The acronym is especially associated with the United States, where U.S. GAAP provides the default reporting framework for many companies and other non-governmental organizations.

The Financial Accounting Standards Board (FASB) publishes and maintains the authoritative U.S. GAAP Accounting Standards Codification. The framework helps make financial reports more consistent and comparable, covering topics such as revenue, inventory, leases, expenses, liabilities, and financial instruments. It also supports accrual accounting, in which revenue and expenses are generally recorded when earned or incurred rather than only when cash changes hands.

GAAP is not identical worldwide. Canada, the United Kingdom, and other jurisdictions have their own generally accepted accounting frameworks, while many countries use or adapt International Financial Reporting Standards (IFRS). A frequent mistake is treating GAAP as a single worldwide rulebook; its detailed requirements depend on the jurisdiction being discussed.