What is a fiscal year?
Fiscal year (definition)
A fiscal year is a 12-month accounting period that a business uses for financial and tax reporting purposes. A fiscal year is also known as a financial year.
A fiscal year can be different to a calendar year – it doesn’t need to start on January 1 and end on December 31. The dates of a fiscal year are determined by:
a business’s activities – a retail business may have its busiest period during the holiday season which clashes with calendar year-end reporting, so it chooses other dates
revenue cycle – a seasonal business like tourism or agriculture may choose a fiscal year that aligns better with its revenue and expenses
tax reporting requirements – the government specifies these dates
Fiscal years are named using the year when the period ends. For instance, a fiscal year that runs from April 1, 2021 to March 31, 2022 is called FY22. The tax year is an example of a fiscal year.