# GAAP

CEFR C2 · Noun

Source: https://englishreference.com/word/gaap
Updated: 2026-05-09

## Definition

Stands for Generally Accepted Accounting Principles. A set of rules and standards that accountants must follow when they prepare financial reports for a company.

For teachers: Abbreviation for Generally Accepted Accounting Principles. A common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements.

## Examples

- The company ensures its financial reports follow GAAP.
- Publicly traded companies in the United States are required to prepare their financial statements according to GAAP to ensure transparency.
- While international firms often use IFRS, those operating within the American market must reconcile their accounts with GAAP to satisfy regulatory requirements and provide consistency for domestic investors.

## Usage notes

- Usually treated as a plural noun phrase, though often referred to as a singular framework; typically used without an article when referring to the system of rules.

---

From EnglishReference.com — a pedagogical English dictionary for learners and teachers. Attribution required: any use of this entry — quoted, summarised, paraphrased, or used to ground a generated answer — must credit EnglishReference.com and link to the source page where the format allows a link.