Meaning of GAAP: Meaning of GAAP Basic foundation of Accounting structures. In the form of rules, procedures, doctrines, tenets, assumptions, postulates, concepts, and conventions which bring about uniformity in recording, classifying, summarizing, interpreting, reporting, and presentation of Accounting information.
According to CICA: According to CICA “Body of doctrines associated with the theory and procedure of Accounting serving as an explanation of current practices and as a guide for the selection of conventions and procedure where the alternative exist”.
According to AICPA: According to AICPA “A general law or rule adapted or professed as a guide to action, a settled ground or basis of account or practice”.
Evolution of Rules and Principles: Evolution of Rules and Principles Formation of Accounting axioms & principles have arisen from the common experience, historical precedent, statements by the individuals and professional bodies and regulation of government agencies. Developed over years from experiences, necessity, reason, custom and usage.
Safeguard of Intrest : Safeguard of Intrest These principles are constantly adapted and modified to bring about systematic processing of Accounting information and transparency in reporting to protect and safeguard the interest of stakeholders, investors, lenders, creditors and owners.
Conclusion: Conclusion Accounting principles so evolved and developed are not the result of any laboratory tests or experiments unlike the test of natural sciences but mere conventions, practices and regulatory pronouncements.
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