Defined: an accounting year is a twelve month period over which a company's accounts are calculated.
An accounting year, or accounting period, is a company’s annual reporting period. Many different kinds of reports are based on the accounting year - including taxes, for example.
When beginning your accounting, you must determine the beginning and end dates of your accounting year straight away.
Twelve months of finances
An accounting year is almost always a period of twelve months, but it does not necessarily have to follow the beginning and end of the twelve month calander year. Corporations can choose to have accounting year periods that end on any date.
For most businesses however, the fiscal year does run from January 1st through December 31st.
Beginning and ending an accounting year
An accounting period starts when
a) a company begins to trade or
b) immediately after the end of a previous accounting period.
An accounting period ends at the earliest of:
- 12 months after the start date,
- At the end of the company's previoud accounting period,
- The start of a winding-up
- On ceasing to be a resident of the UK.