Fiscal year

Accountancy

Key concepts

Accountant · Bookkeeping · Cash and accrual basis ·

Constant Item Purchasing Power Accounting · Cost of goods
sold · Debits and credits · Double-entry system · Fair value
accounting · FIFO & LIFO · GAAP / International Financial
Reporting Standards · General ledger · Historical cost ·
Matching principle · Revenue recognition · Trial balance

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Cost · Financial · Forensic · Fund · Management · Tax

Financial statements

Balance sheet · Statement of cash flows · Statement of

changes in equity · Statement of comprehensive income ·
Notes · MD&A

Auditing

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audit · Sarbanes–Oxley Act

Professional Accountants

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A fiscal year (or financial year, or sometimes budget year) is a period used for calculating
annual ("yearly") financial statements in businesses and other organizations. In many
jurisdictions, regulatory laws regarding accounting and taxation require such reports once per
twelve months, but do not require that the period reported on constitutes a calendar year (i.e.,
January through December). Fiscal years vary between businesses and countries. Fiscal year may
also refer to the year used for income tax reporting.

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[1] and Tesco.[citation needed]

In the United Kingdom, a number of major corporations that were once government owned, such
as BT Group and the National Grid, continue to use the government's financial year, which ends
on the last day of March, as they have found no reason to change since privatisation.

Nevertheless, the fiscal year is identical to the calendar year for about 65% of publicly traded
companies in the United States and for a majority of large corporations in the UK and elsewhere
(with notable exceptions Australia, New Zealand and Japan).[citation needed]

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. In
the Northern hemisphere this is July in one year to June in the next year. In the southern
hemisphere this is January to December of a single calendar year.

Some media/communication based organizations use a Broadcast calendar as the basis for their
fiscal year.

Contents
[hide]

 1 Operation in various countries

o 1.1 Australia
o 1.2 Austro-Hungary
o 1.3 Canada, Hong Kong, India
o 1.4 China
o 1.5 Egypt
o 1.6 France
o 1.7 Germany
 o 1.8 Ireland
o 1.9 Italy
o 1.10 Japan
o 1.11 New Zealand
o 1.12 Pakistan
o 1.13 Russia
o 1.14 Sweden
o 1.15 Taiwan
o 1.16 United Arab Emirates
o 1.17 United Kingdom
o 1.18 United States
 2 Chart of Different Fiscal Years
 3 Tax year
 4 See also
 5 References

[edit] Operation in various countries

In some jurisdictions, particularly those that permit tax consolidation, companies that are part of
a group of businesses must use nearly the same fiscal year (differences of up to three months are
permitted in some 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.

[edit] Australia

The Australian government's financial 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
are required to use it as their own.

[edit] Austro-Hungary

Effective 1911:- Fiscal year is calendar year (Ref Hansard; HC Deb 22 March 1911 vol 23
cc378-82; McKENNA)

[edit] Canada, Hong Kong, India

In Canada,[2] Hong Kong,[3] and India[4][5] the government's financial year runs from April 1 to
March 31.

[edit] China
The fiscal year for all entities starts on January 1 and ends December 31, consistent with the
calendar year, to match the tax year, statuatory year, and planning year.

[edit] Egypt

In the Arab Republic of Egypt, the fiscal year starts on July 1 and concludes on June 30.

[edit] France

Effective 1911:- Fiscal year is calendar year (Ref Hansard; HC Deb 22 March 1911 vol 23
cc378-82; McKENNA)

[edit] Germany

Effective 1911:- Fiscal year is 1st April through 31st March (Ref Hansard; HC Deb 22 March
1911 vol 23 cc378-82; McKENNA)

[edit] Ireland

Ireland also used the year ending April 5 until 2001 when it was changed, at the request of
Finance Minister Charlie McCreevy, to match the calendar year (the 2001 tax year was nine
months, from April to December).

[edit] Italy

Effective 1911:- Fiscal year is 1st July through 30th June (Ref Hansard; HC Deb 22 March 1911
vol 23 cc378-82; McKENNA)

[edit] Japan

In Japan,[6] the government's financial year runs from April 1 to March 31. The fiscal year is
represented by the calendar year in which the period begins followed by the word nendo (年度);
for example the fiscal year from April 1, 2010 to March 31, 2011 is called 2010-nendo.

Japan's income tax year runs from January 1 to December 31, but corporate tax is charged
according to the corporation's own one-year period.

[edit] New Zealand

The New Zealand Government's fiscal[7] and financial reporting[8] year begins on July 1 and
concludes on June 30 of the following year and applies to the budget. The company and personal
financial year[9] begins on April 1 and finishes on March 31 and applies to company and personal
income tax.

[edit] Pakistan
The Pakistan Government's fiscal year starts on July 1 of the previous calendar year and
concludes on June 30. Private companies are free to observe their own accounting year, which
may not be the same as Government of Pakistan's fiscal year.

[edit] Russia

Effective 1911:- Fiscal year is calendar year (Ref Hansard; HC Deb 22 March 1911 vol 23
cc378-82; McKENNA)

[edit] Sweden

The fiscal year for individuals run from 1 January to 31 December.

The fiscal year for an organisation is typically one of the following (cf. Swedish Wikipedia):

 1 January to 31 December
 1 May to 30 April
 1 July to 30 June
 1 September to 31 August

If an organisation wishes to use any other period, the organisation has to ask the tax authorities
for permission.

[edit] Taiwan

Under the Income Tax Act of Taiwan, the fiscal year commences on January 1 and ends on
December 31 of each calendar year. However, an enterprise may elect to adopt a special fiscal
year at the time it is established and can request approval from the tax authorities to change its
fiscal year.[10]

[edit] United Arab Emirates

In the United Arab Emirates, the fiscal year starts on January 1 and ends December 31.

[edit] United Kingdom

In the United Kingdom,[11] the fiscal year for the purposes of personal taxation and payment of
state benefits runs from April 6 to April 5. However the year should run from April 1 to March
31 for the purposes of corporation tax [12] and government financial statements. [13]

Although United Kingdom corporation tax is charged by reference to the government's financial
year, companies can adopt any year as their accounting year: if there is a change in tax rate, the
taxable profit is apportioned to financial years on a time basis.
The April 5 year end for personal tax and benefits 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 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 April 5, which was the "old style" new year of
March 25. A 12th skipped Julian leap day in 1800 changed its start to April 6. It was not changed
when a 13th Julian leap day was skipped in 1900, so the personal tax year in the United
Kingdom is still April 6.

[edit] United States

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.

For example, the United States government fiscal year for 2011 ("FY 2011" or "FY11") is as
follows:

 1st Quarter: October 1, 2010 - December 31, 2010

 2nd Quarter: January 1, 2011 - March 31, 2011
 3rd Quarter: April 1, 2011 - June 30, 2011
 4th Quarter: July 1, 2011 - September 30, 2011

[edit] Chart of Different Fiscal Years

[hide]By Country
Country Purpose J F M A M J J A S O N D J F M A M J J A S O N D
Australia
Canada
Hong Kong
India
China
Portugal
Taiwan
Egypt
Ireland
Japan govt
 corp. and
pers.
govt
New
Zealand corp. and
pers.
Pakistan
pers.
 
Sweden  
corp.
 
 
United Arab Emirates
pers. 6 April
United
Kingdom corp. and
govt
United
govt
States
Country Purpose J F M A M J J A S O N D J F M A M J J A S O N D
[show]By Start Date

[edit] Tax year

The fiscal year for individuals and entities to report and pay income taxes is often known as the
taxpayer's tax year or taxable year. Taxpayers in many jurisdictions may choose their tax year.[14]
In federal countries (e.g., United States, Canada, Switzerland), state/provincial/cantonal tax years
must be the same as the federal year. Nearly all jurisdictions require that the tax year be 12
months or 52/53 weeks.[15] However, short years are permitted as the first year or when changing
tax years.[16]

Most countries require all individuals to pay income tax based on the calendar year. Significant
exceptions include:

 United Kingdom: individuals pay tax on a year ending April 5.

 United States: individuals may (but rarely do) elect any tax year, subject to IRS approval.
[17]
Many jurisdictions require that the tax year conform to the taxpayer's fiscal year for financial
reporting. The United States is a notable exception: taxpayers may choose any tax year, but must
keep books and records for such year.[18]

[edit] See also