Financial Accounting for Managers, 3rd Edition

2

Generally Accepted Accounting Principles and Accounting Standards

CHAPTER OBJECTIVES

This chapter will help the readers to:

• Understand the nature and purpose of GAAP.
• Visualize the impact of important accounting principles on financial reporting.
• Develop familiarity with key accounting principles.
• Apply accounting principles to accounting events.
• Appreciate requirements of Ind AS 8 relating to accounting policies.
• Understand the role of the Institute of Chartered Accountants of India (ICAI) in setting of accounting standards.
• Appreciate the need for having uniform global accounting standards.

2.1 NATURE OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Accounting principles or GAAP are general rules guiding recording of accounting transactions. ...