Skip to main content

Financial Year

Financial Year (Definition)​

A financial year is a period used for calculating annual financial statements in businesses and other organizations.

Key aspects of a financial year include:

  1. Also known as a fiscal year, it may or may not coincide with the calendar year
  2. Typically spans a 12-month period, but can vary in some cases
  3. Start and end dates can be chosen by a company based on its business cycle or regulatory requirements
  4. Used for budgeting, financial reporting, and tax purposes
  5. May differ from the tax year in some jurisdictions
  6. Consistent use of the same financial year allows for year-on-year comparisons
  7. Changes to the financial year must be disclosed and can impact financial reporting

Understanding the concept of a financial year is important for accurate financial reporting, budgeting, and compliance with accounting and tax regulations.