What is the 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 1 April 2023 to 31 March 2024 is called FY24. The tax year is an example of a fiscal year.
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Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.