Generally Accepted Accounting Principles (GAAP)

  • Accounting Method

Overview

In this course you’ll learn the purpose of using generally accepted accounting principles (GAAP).  You'll also learn how and why analysts often modify GAAP based results in order to improve the insights they can get from standard bottom-line summaries.

Objectives

When you complete this course, you will:

  • Understand why GAAP is used, how financial reports are expected to be prepared , and how they are modified
  • Be able to apply your understanding of GAAP to assist with your analysis of a company's financial reports
Course Outline
Title Type Highlight
1. The essentials of GAAP Video
Learn what makes generally accepted accounting principles (GAAP) so valuable for investors.
2. The essentials of GAAP: How it shapes fundamental data Article
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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.

Generally accepted accounting principles (GAAP) based reports are meant to give their users a level... More
3. Circumstances where adjustments to GAAP figures might be useful Article
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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.

This lesson covers certain cases when investment analysts may modify generally accepted accounting... More
4. Normalizing the GAAP perspective on fundamentals Article
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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.

Every company faces nonrecurring situations in its normal course of business. Analysts will seek... More

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