8. GAAP: areas covered

GAAP provides guidance as to which of the following:

When transactions should be recorded

The amounts that should be recorded

What disclosures are required in financial statements presented to the public

Whether or not a firm is considered a going concern

Making estimates used in connection with financial reporting

How to complete tax returns

Provisions to include in construction contracts

Which technology to use for a new medical device

How to value inventory on hand at year end

How to handle the accounting for stock based compensation

How to account for leases

When and under what circumstances revenue can be recognized

How much to pay senior executives

How to present the effect of a change in GAAP when several years' financial statements are presented together in a comparative format

How to compute cost of goods sold

How to determine the selling price of a new product