What is Generally Accepted Accounting Principles (GAAP)?

Generally Accepted Accounting Principles (GAAP) are a set of standardized guidelines and procedures that are used by companies to ensure consistency and accuracy in their financial reporting. In the context of the construction industry, GAAP plays a crucial role in helping companies accurately record and report their financial transactions, assets, and liabilities. This is especially important in construction, where projects can span over several years and involve significant costs.One of the key principles of GAAP in construction accounting is the matching principle, which requires that expenses be recognized in the same period as the revenue they help generate. This is important in construction, where costs are incurred over the course of a project but revenue may not be recognized until the project is completed. Another important principle is the revenue recognition principle,