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{{calendars}}A '''fiscal year''' (or '''financial year''' or '''accounting reference date''', or sometimes '''budget year''') is a 12 or 13-[[month]] period used for calculating annual ("yearly") [[financial statement]]s in [[business]]es and other organizations. In many jurisdictions, regulatory [[law]]s regarding [[accounting]] require such reports once per twelve months, but do not require that the twelve months constitute a [[calendar year]] (i.e. January to December). The financial results presented to shareholders are therefore a "photocopy" (or "snapshot") of the company's accounts at the accounting reference date. Fiscal years vary between businesses and countries.
==Disparity with the calendar year==
Often the fiscal or tax year is specifically established not to match the calendar year (also called natural year) so that accounting year-end work does not coincide with periods of high activity, such as the Christmas shopping rush for retailers, or with [[holiday]] periods when employees may prefer to take vacation.
A popular use of a non-calendar year as the fiscal year involves retailers. In many countries, at the end of December, levels of [[inventory]], [[receivable]]s and [[payable]]s will be higher than at other month ends and consequently more complex and time-consuming to measure accurately. Therefore, retailers commonly use a month other than December to end their fiscal year. January may be chosen as the last month of the fiscal year because activity levels are likely to be closer to normal by the end of January.
In addition, many companies find that it is convenient for purposes of comparison and for accurate stock taking to always end their fiscal year on the same day of the week, where local legislation permits. Thus some fiscal years will have 52 weeks and others 53. Major corporations that adopt this approach include [[Cisco Systems]] and [[Tesco]].
In the [[United Kingdom]], a number of major corporations that were once government owned, such as [[BT Group]] and the [[National Grid UK|National Grid]], continue to use the government's fiscal year, which ends on the last day of March, as they have found no reason to change since [[privatisation]].
Nevertheless, for about 65% of publicly traded companies in the [[United States]] and for the vast majority of large corporations in the UK and elsewhere, except in [[Australia]], [[New Zealand]] and [[Japan]], the fiscal year and calendar year are identical.
<!-- Below needs generalization - public universities? private primary and secondary schools? rest of the world? -->
Many [[universities]] have a fiscal year which ends during the summer, both to align the fiscal year with the [[school year]], and because the school is normally less busy during the summer months. Examples include [[Harvard University]]<ref name="harvard">{{cite web |url=http://www.hoovers.com/harvard-university/--ID__40201,ticker__--/free-co-fin-factsheet.xhtml |title=Harvard University - Financials |work=Hoovers |accessdate=2008-03-20 }} Harvard University's fiscal year ends at the end of June.</ref> and most English universities.<ref name="englishuniversities">{{cite web |url=http://www.hefce.ac.uk/pubs/hefce/2006/06_24/06_24.pdf |format-PDF |title=Model financial memorandum between HEFCE and institutions |work=Higher Education Funding Council for England |date=2006-08-01 |accessdate=2008-03-20 }} Fiscal year ends at the end of July.</ref>
==Operation in various countries==
Such fiscal years are typically numbered using a calendar year and quarter thereof. A '''fiscal quarter''' is 3 months (1/4 of a year). For example, the [[Federal government of the United States|United States government]] fiscal year for [[2008]] ("FY08", sometimes written "FY07–08") is as follows:
*1st Quarter: [[October 1]], [[2007]] – [[December 31]], [[2007]]
*2nd Quarter: [[January 1]], [[2008]] – [[March 31]], [[2008]]
*3rd Quarter: [[April 1]], [[2008]] – [[June 30]], [[2008]]
*4th Quarter: [[July 1]], [[2008]] – [[September 30]], [[2008]]
So the U.S. government's fiscal year begins on [[October 1]] of the previous calendar year and ends on [[September 30]] of the year with which it is numbered. Prior to [[1976]], the fiscal year began on [[July 1]] and ended on [[June 30]]. The [[Congressional Budget and Impoundment Control Act of 1974]] stipulated the change to allow Congress more time to arrive at a budget each year, and provided for what is known as the "transitional quarter" from [[July 1]], [[1976]] to [[September 30]], [[1976]]. As stated above, the tax year for a business is governed by the fiscal year it chooses.
The [[Government of Australia|Australian government]]'s fiscal year begins on [[July 1]] and concludes on [[June 30]] of the following year. This applies for personal income tax and the federal budget, and most companies use it as their own. In [[Canada]], the [[United Kingdom]], [[New Zealand]], [[India]] and [[Hong Kong]], the government's financial year runs from [[April 1]] to [[March 31]], and the [[United Kingdom corporation tax]] is charged by reference to that period.
In the UK, the '''tax year''' (which governs liability to [[income tax]] and [[capital gains tax]]) runs from [[April 6]] to [[April 5]]. This reflects the old [[ecclesiastical calendar]], with [[New Year]] falling on [[March 25]] (''[[Lady Day]]''), the difference being accounted for by the eleven days "missed out" when [[Kingdom of Great Britain|Great Britain]] converted from the [[Julian Calendar]] to the [[Gregorian Calendar]] in [[1752]] (the British tax authorities, and landlords were unwilling to lose 11 days of tax and rent revenue, so under provision 6 (''Times of Payment of Rents, Annuities, &c.'') of the [[Calendar (New Style) Act 1750]], the 1752–3 tax year was extended by 11 days). From 1753 until 1799, the tax year in Great Britain began on [[5 April]], which was the "[[old style]]" new year of [[25 March]]. A 12th skipped Julian leap day in 1800 changed its start to [[6 April]]. It was not changed when a 13th Julian leap day was skipped in 1900, so the tax year in the [[United Kingdom]] is still [[6 April]]. [[Republic of Ireland|Ireland]] also used this year until 2001 when it was changed to match the calendar year (the 2001 tax year was nine months, from April to December).
Companies that are units within a "group" of businesses must all use nearly the same fiscal year (differences of up to three months are permitted in most jurisdictions, such as the U.S. and [[Japan]]), with consolidating entries to adjust for transactions between units with different fiscal years, so the same resources will not be counted more than once or not at all.
==References==
*StreetAuthority.com's [http://www.streetauthority.com/terms/f/fiscalyear.asp Financial Glossary]
<div class="references-small"><references /></div>
[[Category:Generally Accepted Accounting Principles]]
[[Category:Taxation]]
[[Category:Calendars]]
[[de:Geschäftsjahr]]
[[es:Año fiscal]]
[[eo:Financa jaro]]
[[it:Anno fiscale]]
[[he:שנת כספים]]
[[ja:会計年度]]
[[pl:Rok podatkowy]]
[[fi:Tilikausi]]
[[sv:Räkenskapsår]]
[[vi:Năm tài chính]]
[[hu:Üzleti év]]
[[zh:財政年度]]
==Disparity with the calendar year==
Often the fiscal or tax year is specifically established not to match the calendar year (also called natural year) so that accounting year-end work does not coincide with periods of high activity, such as the Christmas shopping rush for retailers, or with [[holiday]] periods when employees may prefer to take vacation.
A popular use of a non-calendar year as the fiscal year involves retailers. In many countries, at the end of December, levels of [[inventory]], [[receivable]]s and [[payable]]s will be higher than at other month ends and consequently more complex and time-consuming to measure accurately. Therefore, retailers commonly use a month other than December to end their fiscal year. January may be chosen as the last month of the fiscal year because activity levels are likely to be closer to normal by the end of January.
In addition, many companies find that it is convenient for purposes of comparison and for accurate stock taking to always end their fiscal year on the same day of the week, where local legislation permits. Thus some fiscal years will have 52 weeks and others 53. Major corporations that adopt this approach include [[Cisco Systems]] and [[Tesco]].
In the [[United Kingdom]], a number of major corporations that were once government owned, such as [[BT Group]] and the [[National Grid UK|National Grid]], continue to use the government's fiscal year, which ends on the last day of March, as they have found no reason to change since [[privatisation]].
Nevertheless, for about 65% of publicly traded companies in the [[United States]] and for the vast majority of large corporations in the UK and elsewhere, except in [[Australia]], [[New Zealand]] and [[Japan]], the fiscal year and calendar year are identical.
<!-- Below needs generalization - public universities? private primary and secondary schools? rest of the world? -->
Many [[universities]] have a fiscal year which ends during the summer, both to align the fiscal year with the [[school year]], and because the school is normally less busy during the summer months. Examples include [[Harvard University]]<ref name="harvard">{{cite web |url=http://www.hoovers.com/harvard-university/--ID__40201,ticker__--/free-co-fin-factsheet.xhtml |title=Harvard University - Financials |work=Hoovers |accessdate=2008-03-20 }} Harvard University's fiscal year ends at the end of June.</ref> and most English universities.<ref name="englishuniversities">{{cite web |url=http://www.hefce.ac.uk/pubs/hefce/2006/06_24/06_24.pdf |format-PDF |title=Model financial memorandum between HEFCE and institutions |work=Higher Education Funding Council for England |date=2006-08-01 |accessdate=2008-03-20 }} Fiscal year ends at the end of July.</ref>
==Operation in various countries==
Such fiscal years are typically numbered using a calendar year and quarter thereof. A '''fiscal quarter''' is 3 months (1/4 of a year). For example, the [[Federal government of the United States|United States government]] fiscal year for [[2008]] ("FY08", sometimes written "FY07–08") is as follows:
*1st Quarter: [[October 1]], [[2007]] – [[December 31]], [[2007]]
*2nd Quarter: [[January 1]], [[2008]] – [[March 31]], [[2008]]
*3rd Quarter: [[April 1]], [[2008]] – [[June 30]], [[2008]]
*4th Quarter: [[July 1]], [[2008]] – [[September 30]], [[2008]]
So the U.S. government's fiscal year begins on [[October 1]] of the previous calendar year and ends on [[September 30]] of the year with which it is numbered. Prior to [[1976]], the fiscal year began on [[July 1]] and ended on [[June 30]]. The [[Congressional Budget and Impoundment Control Act of 1974]] stipulated the change to allow Congress more time to arrive at a budget each year, and provided for what is known as the "transitional quarter" from [[July 1]], [[1976]] to [[September 30]], [[1976]]. As stated above, the tax year for a business is governed by the fiscal year it chooses.
The [[Government of Australia|Australian government]]'s fiscal year begins on [[July 1]] and concludes on [[June 30]] of the following year. This applies for personal income tax and the federal budget, and most companies use it as their own. In [[Canada]], the [[United Kingdom]], [[New Zealand]], [[India]] and [[Hong Kong]], the government's financial year runs from [[April 1]] to [[March 31]], and the [[United Kingdom corporation tax]] is charged by reference to that period.
In the UK, the '''tax year''' (which governs liability to [[income tax]] and [[capital gains tax]]) runs from [[April 6]] to [[April 5]]. This reflects the old [[ecclesiastical calendar]], with [[New Year]] falling on [[March 25]] (''[[Lady Day]]''), the difference being accounted for by the eleven days "missed out" when [[Kingdom of Great Britain|Great Britain]] converted from the [[Julian Calendar]] to the [[Gregorian Calendar]] in [[1752]] (the British tax authorities, and landlords were unwilling to lose 11 days of tax and rent revenue, so under provision 6 (''Times of Payment of Rents, Annuities, &c.'') of the [[Calendar (New Style) Act 1750]], the 1752–3 tax year was extended by 11 days). From 1753 until 1799, the tax year in Great Britain began on [[5 April]], which was the "[[old style]]" new year of [[25 March]]. A 12th skipped Julian leap day in 1800 changed its start to [[6 April]]. It was not changed when a 13th Julian leap day was skipped in 1900, so the tax year in the [[United Kingdom]] is still [[6 April]]. [[Republic of Ireland|Ireland]] also used this year until 2001 when it was changed to match the calendar year (the 2001 tax year was nine months, from April to December).
Companies that are units within a "group" of businesses must all use nearly the same fiscal year (differences of up to three months are permitted in most jurisdictions, such as the U.S. and [[Japan]]), with consolidating entries to adjust for transactions between units with different fiscal years, so the same resources will not be counted more than once or not at all.
==References==
*StreetAuthority.com's [http://www.streetauthority.com/terms/f/fiscalyear.asp Financial Glossary]
<div class="references-small"><references /></div>
[[Category:Generally Accepted Accounting Principles]]
[[Category:Taxation]]
[[Category:Calendars]]
[[de:Geschäftsjahr]]
[[es:Año fiscal]]
[[eo:Financa jaro]]
[[it:Anno fiscale]]
[[he:שנת כספים]]
[[ja:会計年度]]
[[pl:Rok podatkowy]]
[[fi:Tilikausi]]
[[sv:Räkenskapsår]]
[[vi:Năm tài chính]]
[[hu:Üzleti év]]
[[zh:財政年度]]
