GAAP
Generally Accepted Accounting Principles as determined by the Financial Accounting Standards Board (FASB).
(Investors have a strange fascination with four letter acronyms – and three letter acronyms, and five letter acronyms, and…)
Anyway, GAAP is an accrual method of accounting, which means income is reported when earned and expenses are reported when incurred. This better represents economic realities than cash basis accounting, but also leaves a little room for some creative interpretation of when certain transactions ought to be recognized.