Per GAAP, companies are responsible for providing reports on their cash flows, profit-making operations and overall financial conditions. There are three major financial statements required under GAAP:

• Income statement
• Balance sheet
• Cash flow statement

Presentation of the Financial Statements in accordance with GAAP is governed by ASC-205. The Standard defines the following as a full set of financial statements:

• Financial position at the end of the period
• Earnings, which may be shown in a separate statement or within one continuous statement of comprehensive income
• Comprehensive income for the period in one statement or two consecutive statements
• Cash flows during the period
• Investments by and distributions to the owners during the period.

Generally accepted accounting principles (GAAP) are a set of rules that encompass the details, complexities, and legalities of business and corporate accounting. The Financial Accounting Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved accounting methods and practices.

This course will focus on the GAAP presentation of the major financial statements. We will highlight the concepts in ASC 205 regarding the presentation of those financial statements.