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Learn what makes generally accepted accounting principles (GAAP) so valuable for investors.
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Generally accepted accounting principles (GAAP) based reports are meant to give their users a level playing field for evaluating company financial performance across time periods and to allow users to make meaningful, like-on-like comparisons among companies.
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This lesson covers certain cases when investment analysts may modify generally accepted accounting principles (GAAP) based results in order to improve the insights they can get from standard bottom-line summaries.
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Every company faces nonrecurring situations in its normal course of business. Analysts will seek ways to normalize financial data to be able to compare a company's performance from period to period more precisely and to view the company and its competitors along a standardized baseline.
Generally accepted accounting principles (GAAP) provides the rules of the road for companies issuing financial reports such as income statements and balance sheets to investors. Watch this video to learn what makes GAAP's guidelines so valuable.
Wealth Management Systems Inc. Financial Communications
