From the course: Accounting Foundations: Understanding the GAAP (Generally Accepted Accounting Principles)

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A look at the US GAAP applied

A look at the US GAAP applied

From the course: Accounting Foundations: Understanding the GAAP (Generally Accepted Accounting Principles)

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A look at the US GAAP applied

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- Mind the gap. Front tooth gap, skills gap, U.S. GAAP. We hear the term gap nearly every day in so many different contexts. Let's explore the most interesting and informative of these, U.S. GAAP by taking a look at actual Nike financial statements, and see if the assumptions and principles of U.S. GAAP seem to make a bit more sense once we see them put into action. First, as we look at Nike's 2020 balance sheet, we can assume that an accrual basis of accounting was used to record these assets and liabilities. This means that these assets and liabilities were recorded when the economic event occurred, regardless of whether cash was paid. This is the alternative to cash basis accounting. Remember that U.S. GAAP does not permit cash basis accounting for publicly traded companies. I also want you to notice that there is a line item in the asset section for property, plant and equipment net. You can be confident that…

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