What is the difference between GAAP and OCBOA? - ProProfs Discuss
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What is the difference between GAAP and OCBOA?

Asked by R. Barnes, Last updated: May 17, 2020

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T. Moore

Have keen interest in writing, traveller by heart.

T. Moore, Writer, MA, Washington

Answered Jun 27, 2019

GAAP is the short form of Generally Accepted Accounting Principles. These are different principles used by companies and business organizations to prepare their financial statements or reports. The accounting information of a company can be prepared and reported using GAAP based on the detective and the consideration of different policies that are in action in the company. OCBOA, on the other hand, is the short form of Other Comprehensive Basis Of Accounting.

GAAP is the short form of Generally Accepted Accounting Principles. These are different principles
Aside from the fact that it is also adopted in the preparation of the financial statements and reports of a company, it can also be used to give a report on the tax-based information about a company and also cash-basis financial reports of a company. Due to the way OCBOA is structured, it can be understood more easily by people than a financial statement prepared using GAAP and that's why it is called a comprehensive financial statement. Another thing is, you don't need to prepare the statement of cash flow of a company when using OCBOA, but you would need to do in GAAP.

 

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