US GAAP (also only GAAP) - Generally Accepted Accounting Principles - is a common set of accounting standards and principles that organizations use to compile their financial statements. GAAP is a combination of authoritative standards and commonly used methods for recording and reporting accounting information. This is only a recommended practice. GAAP accounting standards are used primarily in the United States and Canada, where they are issued and updated by FASB - Financial Accounting Standards Board and go through the approval processes.
IAS/IFRS are the accounting standards used in the European Union.
Basic Financial Statements according to US GAAP are:
- Balance Sheet - statement of enterprise’s financial situation which contains detailed information about business assets, liabilities and equity
- Income Statement - it includes data about revenue and costs
- Cash Flow Statements - it is an overview about cash flow of the organization, thus the difference between cash income and cash expenditure for given period
- Statement of Owner’s Equity