Generally Accepted Accounting Principles (GAAP)
GAAP refer to accounting principles geared towards guiding firms in the preparation of financial statements through adherence to stipulated financial processes. GAAP incorporates authoritative standards, which are developed by numerous that facilitate the recording and reporting processes of financial accounting information (Barth et al., 2012: Kothari et al., 2010). The adoption of GAAP remains critical to firms as it promotes the efficiency of communicating financial information within the internal and external business environments. The process facilitates cross-examination and review of financial reporting among different companies in the market (Barth et al., 2012: Kothari et al., 2010).
GAAP promotes the regulation of financial practices adopted among US companies. GAAP is issued by the Financial Accounting Standards Board (FASB) established by the International Accounting Standards Board (IASB). GAAP principles remain essential for firms in the event of the distribution of financial statements outside the company (Barth et al., 2012: Kothari et al., 2010). The process ensures that the financial rules and procedures adopted by the firm remain in congruence and agreement with the principles stipulated by the US Securities and Exchange Commission (SEC).
GAAP remains critical to the financial process adopted by firms as it facilitates the revenue recognition process. The principles promote the balance sheet item classification together with the review of outstanding share measurements (Barth et al., 2012: Kothari et al., 2010). The adoption of GAAP measures in improving financial compliance remains crucial in the US as the passage of non-GAAP measures require proper notification within financial statements. The provision of warnings if a firm adopts non-GAAP measures remains essential in the case of public disclosure such as through the press (Barth et al., 2012: Kothari et al., 2010). The adoption of GAAP remains instrumental to the financial process as it promotes the maintenance of high levels of reporting in financial statements.
Tootsie Roll
The company places emphasis on attracting and retaining a skilled employee base necessary in promoting organizational efficiency and growth. The company supports the adoption of collaborative processes that foster the level of employee and management involvement in the development of favorable company policies and operation activities. The company identifies the importance of long-term and short-term growth and places emphasis on the adoption of processes that enhance the development of objectives that meet the firm’s long-term and short-term needs. The company ensures that the adopted financial operations remain conservative necessary in facilitating the efficiency of the reporting process. The company provides that the selected business processes maintain the highest product and service Quality Through increased operational efficiency within the adopted organizational processes. The company assumes the existent innovations necessary in promoting the level of operational efficiency and effectiveness. The company supports outsourcing and vertical integration of operations in avenues that support the cost-effectiveness capacity of the firm (Tootsie, 2016).
Liabilities refer to the debts incurred by a firm whereas assets refer to the savings and existent money within the enterprise. The total assets of the company as at 2015 was recorded at $ 908,983 while the total liabilities of the company has been registered at $ 908,983 (698.183) thus the total liabilities excluding the shareholder's equity was $ 201,435. The difference between the assets and liabilities is referred to as the equity or net assets. Therefore, the net worth with the exclusion of shareholders equity may be recorded as $ 707,548 (Tootsie, 2016). The company provides a viable investment platform attributed to an increase in profits at 4% recorded in the past five years, which highlight continual business growth.
References
Barth, M. E., Landsman, W. R., Lang, M., & Williams, C. (2012). Are IFRS-based and US
GAAP-based accounting amounts comparable? Journal of Accounting and Economics, 54(1), 68-93.
Kothari, S. P., Ramanna, K., & Skinner, D. J. (2010). Implications for GAAP from an analysis of
positive research in accounting. Journal of Accounting and Economics, 50(2), 246-286.
Tootsie (2016). Company Financials: Annual Report 2015. Retrieved August 2016 from
http://tootsie.com/financials/
