Fiscal Year
A 12-month period used for accounting and tax purposes.
A fiscal year (FY) is the 12-month accounting period used for financial reporting and tax filing. While many businesses use the calendar year, others choose different dates to match seasonal cycles. Retailers often end January 31 to capture the full holiday season, and changing your fiscal year requires IRS approval via Form 1128.
Example
A ski resort selects a fiscal year from May 1 to April 30 so its busiest season falls in the middle of the reporting period rather than straddling two years.
Why It Matters for Your Business
Your fiscal year determines when annual taxes are due and how financial performance is measured, so choosing the right period simplifies accounting and reporting.
More Accounting Terms
Accounts Payable
Money owed by a business to its suppliers or creditors for goods or services received but not yet paid for.
Accounts Receivable
Money owed to a business by its customers for goods or services delivered but not yet paid for.
Accrual Accounting
An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.
Asset
Any resource owned by a business that has economic value and can provide future benefits.
Balance Sheet
A financial statement showing assets, liabilities, and equity at a specific point in time.
Related Financial Guides & Resources
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