Fiscal Year (FY)

A 12 month reporting period for a company.

What is a Fiscal Year (FY)?

A fiscal year, also known as a budget year, is a period of time used by the government and businesses for accounting purposes to formulate annual financial reports.

A fiscal year consists of 12-months or 52-weeks and might not end on December 31. A period which is set from January 1 to December 31 is called a calendar year.

Example of Usage

A Fiscal year that does not follow the calendar year, is a period such as October 1, 2009 – September 30, 2010. Accountants will reference revenue accrued on July 30 as revenue accrued in the fiscal year 2010.

A fiscal years that follows a  the 2010 calendar year would refer to the period between January 1, 2010, and December 31, 2010.

Why use a Different Fiscal Year?

Government fiscal year

The application of a fiscal year could be different in each country. Here are few examples:

  • Australia’s fiscal year starts on July 1 and ends on June 30.

  • Austria’s fiscal year is the calendar year, January 1 – December 31.

  • The United States Federal Government’s fiscal year starts on October 1 and ends on September 30.

What is a Fiscal Year (FY)?

A fiscal year, also known as a budget year, is a period of time used by the government and businesses for accounting purposes to formulate annual financial reports.

A fiscal year consists of 12-months or 52-weeks and might not end on December 31. A period which is set from January 1 to December 31 is called a calendar year.

Example of Usage

A Fiscal year that does not follow the calendar year, is a period such as October 1, 2009 – September 30, 2010. Accountants will reference revenue accrued on July 30 as revenue accrued in the fiscal year 2010.

A fiscal years that follows a  the 2010 calendar year would refer to the period between January 1, 2010, and December 31, 2010.

Why use a Different Fiscal Year?

Government fiscal year

The application of a fiscal year could be different in each country. Here are few examples:

  • Australia’s fiscal year starts on July 1 and ends on June 30.

  • Austria’s fiscal year is the calendar year, January 1 – December 31.

  • The United States Federal Government’s fiscal year starts on October 1 and ends on September 30.​

Business fiscal year

The use of a fiscal year presents a better business performance as it is geared toward the natural seasonality of its the financial report.

Business and organizations may choose their fiscal year based on preference. A good practice of accounting principle suggests closing the fiscal year at the low point of the business. For example, agriculture companies end their fiscal year right after harvest season.

Cost Savings

Since the majority of businesses have their fiscal year end as December 31, that is when the accounting firms are busiest.  Sometimes businesses will pick a different yearend when the accountants are less busy, and they may get a lower rate.

The use of a fiscal year presents a better business performance as it is geared toward the natural seasonality of its the financial report.

Business and organizations may choose their fiscal year based on preference. A good practice of accounting principle suggests closing the fiscal year at the low point of the business. For example, agriculture companies end their fiscal year right after harvest season.

Cost Savings

Since the majority of businesses have their fiscal year end as December 31, that is when the accounting firms are busiest.  Sometimes businesses will pick a different yearend when the accountants are less busy, and they may get a lower rate.