Compliance & Technical
What is GAAP (Generally Accepted Accounting Principles)?
GAAP (Generally Accepted Accounting Principles) is the set of accounting standards, principles, and procedures established by the Financial Accounting Standards Board (FASB) that U.S. companies must follow when preparing financial statements.
Explanation
GAAP governs how transactions are recognized, measured, and reported in financial statements. Key principles include revenue recognition (when to record revenue), matching principle (expenses matched to related revenues), and consistency (using the same methods period to period). For accounting automation, GAAP compliance means ensuring that automated processes correctly apply these principles: revenue is recognized at the right time, accruals are properly calculated, and consistent treatment is applied to similar transactions. Automation can actually improve GAAP compliance by applying rules consistently across all transactions, eliminating the human variation that creates period-to-period inconsistencies.
How Rima relates
Rima's extraction accuracy and audit trail support GAAP-compliant accounting workflows by ensuring every recorded transaction is traceable to a verified source document.
Learn about audit-ready accountingRelated Terms
IFRS (International Financial Reporting Standards)
The international accounting standards used in over 140 countries outside the United States.
Internal Controls
Policies and procedures designed to prevent errors, fraud, and ensure accurate financial reporting.
Audit Trail
A chronological record that traces every action taken on a document or transaction back to its source.
Accrual Accounting
An accounting method that records revenue and expenses when they are earned or incurred, not when cash changes hands.
See it in action
Rima automates the manual document workflows accounting teams spend hours on every week.