GAAP

GAAP (Generally Accepted Accounting Principles) is the standardized set of accounting rules and conventions used mainly in the United States, governing how revenue, expenses, and assets are recognized and reported.

What GAAP covers

US GAAP is maintained by the Financial Accounting Standards Board and codified into topics covering revenue, leases, financial instruments, business combinations, and the rest. Its character is rules-based: standards give detailed criteria and often industry-specific guidance, which trades some flexibility for comparability and for a clearer answer when a transaction is unusual. IFRS, the framework used across most of the rest of the world, sets objectives and leaves more to judgment.

The frameworks agree on most routine transactions. They differ on specific topics, including inventory costing methods, capitalization of development costs, and whether an impairment can later be reversed. A group with US and non-US entities often maintains both views from the same ledger, with a documented bridge between them.

Where GAAP and management numbers part ways

Most companies report more than their GAAP statements. Adjusted EBITDA, annual recurring revenue, bookings, and similar measures are useful for running the business and are not GAAP figures. The problem is not that they exist, it is when they float free of the statements: an adjusted figure computed in a spreadsheet, revised between drafts, and never reconciled back to a GAAP line. By the time an investor or auditor asks how the two relate, reconstructing the bridge takes longer than building it would have.

The discipline that holds is simple. Every non-GAAP measure should reconcile to a named GAAP line, the adjustments should be listed, and the calculation should produce the same answer every time it runs. See EBITDA for a common case.

How Rexfin handles it

Rexfin’s IFRS-first presentation shape is built for GCC-reporting entities, but the same reconciled, cited actuals underneath the model hold regardless of which reporting framework a statement is presented in. Adjusted measures are defined as deterministic calculations over those actuals rather than as spreadsheet formulas, so each one traces back to the statutory lines it adjusts and to the source records beneath them.