Historically the US-GAAP was developed based on multiple single regulations and cases. These regulations and cases have been systematically recorded by the Accounting Standards Codification. Other than the regulations of the IFRS the regulations of the US-GAAP are less focused on strict principals but however they are also very detailed and precise.
The main goal of all financial statements based on the rules of the US-GAAP is to inform one company's capital investors.
The principal of a "fair presentations" should show the economic situation of one company and its potential for future success without hiding any important information.
Other than financial statements based on the German HGB, financial statements that are based on the rules and regulations of the US-GAAP do not focus on the calculation of any payments or tax obligations.
Consequently annual accounts based on the US-GAAP do not have any influence on the tax amount that one company has to pay. Also the these financial statements do not influence the amount of dividends that will be paid to the shareholders as such decisions are taken by the Board of Directors.
Principally the importance of the US-GAAP is declining and the importance of the IFRS in contrary is increasing during the last years.
Mainly the increasing obligation for European companies to publish their results based on the regulations of the IFRS has lead to a shift towards the IFRS.
The 20 most important industrial countries (G20) are trying to harmonize the regulations of the IFRS and of the US-GAAP.
The US-GAAP was developed by the Governmental Accounting Standards Board (GASB). The GASB is a private organization for the financial reporting of the States, Counties and Communities of the United States of America.
Structure Of The Financial Statement According to the US-GAAP
A financial statement that follows the US-GAAP always consists of the following parts:
- „statement of financial position"
- „statement of earnings“
- „statement of cash flow“
- „statement of investments and distribution to owners“
The US-GAAP standards have been established in order to provide information for potential and actual investors and are one of the internationally accepted accounting principals. The other internationally accepted standard is the Financial Reporting Standard (IFRS).
United States Generally Accepted Accounting Principles (US-GAAP)
The United States Generally Accepted Accounting Principals (US-GAAP) are the accounting principals and procedures used within the United States of America.