Mind the GAAP.

We’ll be hearing a lot more about GAAP in the run-up to Governor-elect Dannel Malloy’s first day in office on January 5th.  He pledged to require state finances to operate on the rubric of the more transparent standards that have evolved under GAAP.

A working definition of Malloy’s brave new world of public financial accounting will help us all understand what his policy will likely mean as events unfurl.

Here’s the fundamental meaning:

“GAAP” is an acronym that stands for Generally Accepted Accounting Principles. GAAP is a framework of accounting standards, rules and procedures, defined by the professional accounting industry, which has been adopted by nearly all publicly traded U.S. companies.

You can learn more by clicking here.  As it applies to state government, you should add to the formal definition this addendum:  It’s worse than we thought.