Accounting Standards

Definition of Accounting Standards as it relates to Business, Accounting Principles, Corporate Finance

Accounting Standards refer to specific rules and guidelines established by authoritative accounting bodies, designed to ensure consistency and transparency in financial reporting across different businesses and industries. These standards govern how companies account for their financial transactions, assets, liabilities, equity, revenues, and expenses. They are underpinned by fundamental accounting principles such as relevance, reliability, comparability, understandability, and materiality. Accounting Standards play a critical role in corporate finance by providing investors, creditors, analysts, and other stakeholders with accurate, consistent, and comparable financial information to make informed decisions. Examples of Accounting Standards include GAAP (Generally Accepted Accounting Principles) in the U.S., IFRS (International Financial Reporting Standards), and FASB (Financial Accounting Standards Board) pronouncements.

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External Links

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