BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -All organizations do not follow the GAAP model. Rather, particular businesses follow industry-specific best practices designed to reflect the nuances and complexities of different business areas. For example, banks operate using different accounting and financial reporting methods than those used by retail businesses.

Detailed explanation-2: -Public companies in the U.S. must follow GAAP when their accountants compile their financial statements. GAAP is guided by ten key tenets and is a rules-based set of standards. It is often compared with the International Financial Reporting Standards (IFRS), which is considered more of a principles-based standard.

Detailed explanation-3: -The use of GAAP is not mandatory for all businesses, but SEC requires publicly traded and regulated companies to follow GAAP for the purpose of financial reporting.

Detailed explanation-4: -U.S. Generally Accepted Accounting Principles (GAAP) is only used in the United States. GAAP is established by the Financial Accounting Standards Board (FASB).

Detailed explanation-5: -Principles Based vs. One of the major differences lies in the conceptual approach: U.S. GAAP is rule-based, whereas IFRS is principle-based. The inherent characteristic of a principles-based framework is the potential of different interpretations for similar transactions.