What is ‘Generally Accepted Principles And Practices – GAPP’
Standardized business procedures related to the operation of sovereign wealth funds (SWFs). The generally accepted principles and practices (GAPP), agreed upon by 23 countries with SWFs in October 2008, state that SWFs will pursue financial, rather than political, agendas. What’s more, SWFs abiding by the GAPP vow to make their objectives, investment practices and structures transparent to all.
Also known as known as the Santiago Principles.
Explaining ‘Generally Accepted Principles And Practices – GAPP’
SWFs are defined as “special purpose investment funds or arrangements, owned by the general government” and are designed to “hold, manage or administer assets to achieve financial objectives.” The 24 Santiago Principles simply provide a framework for this in three key areas: legal, institutional, and investment and risk.
Furthermore, the International Working Group (IWG), which drafted the Principles, has agreed to consider ways to monitor progress and refine the Principles as new needs and challenges arise.
Further Reading
- Institutional theory and accounting rule choice: an analysis of four US state governments' decisions to adopt generally accepted accounting principles – www.sciencedirect.com [PDF]
- Earnings management under German GAAP versus IFRS – www.tandfonline.com [PDF]
- International GAAP differences: The impact on foreign analysts – meridian.allenpress.com [PDF]
- The drivers, consequences and policy implications of non-GAAP earnings reporting – www.tandfonline.com [PDF]
- The 'Santiago Principles' for Sovereign Wealth Funds: A Case Study on International Financial Standard-Setting Processes – academic.oup.com [PDF]
- The political economy of sovereign wealth funds – link.springer.com [PDF]
- Instituting a transnational accountability regime: The case of sovereign wealth funds and “GAPP” – www.sciencedirect.com [PDF]
- Misplaced fears put to rest: Financial crisis reveals the true motives of sovereign wealth funds – heinonline.org [PDF]
