ACCOUNTING GLOSSARY
GAAP
Generally Accepted Accounting Principles
A recognized U.S. framework for financial accounting and reporting.
What does GAAP mean?
A recognized U.S. framework for financial accounting and reporting. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
GAAP in context
A lender may request CPA-prepared statements presented under GAAP.
Why it matters in financing
GAAP can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related accounting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.