Accounting principles are the rules and guidelines that companies must follow when reporting financial data.
- Accounting standards are implemented to improve the quality of financial information reported by companies.
- In the United States, the Financial Accounting Standards Board (FASB) issues Generally Accepted Accounting Principles (GAAP).
- GAAP is required for all publicly traded companies in the U.S.; it is also routinely implemented by non-publicly traded companies as well.
- Internationally, the International Accounting Standards Board (IASB) issues International Financial Reporting Standards (IFRS).
- The FASB and IASB sometimes work together to issue joint standards on hot-topic issues, but there is no intention for the U.S. to switch to IFRS in the foreseeable future.