Generally Accepted Accounting Principles

Generally accepted accounting principles are the accounting rules and standards used to prepare U.S. financial statements.

A simple example

A company may report GAAP net income and also present an adjusted measure that excludes selected items.

Why this matters to income investors

GAAP provides a common reporting framework, while company-defined non-GAAP measures may make additional adjustments that require reconciliation and judgment.

How to use generally accepted accounting principles in your research

Start with the audited financial statements, then inspect every adjustment used to reach a supplemental measure.

This material is general education and information, not individualized investment, tax, or legal advice.