URGENT! Example of Principle & Rule Based Accounting Standard?

Question

I need an answer, QUICKLY, can someone provide me with an example of a Principle and Rule Based Accounting Standard and a brief explanation of the rationale of using that sort of standard.

PLEASE HELP!, i've got very limited time, THANKS!

Answer 1

Generally Accepted Accounting Principles (GAAP) is the standard framework of guidelines for financial accounting. It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements.

One key aspect of GAAP is an emphasis of "general" as a conceptual realization of variables in method. Far from suggesting that all accounting exercises employ the same method and generate the same results, GAAP accommodates variation in applied accounting methods as long as the methods generally adhere to this set of principles, which are more broad than specific.

Pursuant to the foregoing, not only therefore does this provide for variation in method, the natural conclusion is GAAP creates an environment in which financial reporting results can vary depending on purpose. One company in one fiscal year can produce different reports, all completed within GAAP, for different audiences or different purposes, and all these reports can be considered correct.

A company may report financial performance considered acceptable by the accounting firm producing the review; yet upon closer investigation oddities may be revealed, requiring a restatement of all or part of the report. Recently (2006 - 2007) well known corporations such as Apple and Research In Motion had to restate certain aspects of their financial reports that met with disagreement as to their adherence to certain "best practices