Hey bro... trying to help you out with having you understand what FISCAL YEAR means
PART OF
The Evolution of Accounting and Accounting Terminology
CORPORATE FINANCE & ACCOUNTING ACCOUNTING
Fiscal Year (FY)
By
ALICIA TUOVILA
Reviewed by
BRIAN BARNIER
Updated May 19, 2021
What Is a Fiscal Year (FY)?
A fiscal year is a one-year period that companies and governments use for financial reporting and budgeting. A fiscal year is most commonly used for accounting purposes to prepare financial statements. Although a fiscal year can start on January 1st and end on December 31st, not all fiscal years correspond with the calendar year. For example, universities often begin and end their fiscal years according to the school year.
A fiscal year is important to publicly-traded corporations and their investors since it is the period over which revenue and earnings are measured, making year-to-year comparisons possible. For tax purposes, the Internal Revenue Service (IRS) allows companies to be either calendar-year taxpayers or fiscal-year taxpayers.1?
KEY TAKEAWAYS
A fiscal year is a one-year period chosen by a company to report its financial information.
Financial reports, external audits, and federal tax filings are based on a company's fiscal year.
Companies may choose to report their financial information on a non-calendar fiscal year based on the specific nature and revenue cycle of that business.
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Fiscal Year
Understanding Fiscal Year (FY)
A fiscal year is a period of time lasting one year but not necessarily starting at the beginning of the calendar year. Countries, companies, and organizations can start and end their fiscal years differently, depending on their accounting and external audit practices.
The U.S. federal government runs on an Oct 1 to Sep 30 fiscal year. It is common for nonprofit organizations to observe a Jul 1 to Jun 30 fiscal year. Fiscal years that vary from a calendar year are typically chosen due to the specific nature of the business. For example, nonprofit organizations typically align their year with the timing of grant awards.
Fiscal years are referenced by their end date or end year. For example, to reference a nonprofit organization's fiscal year-end, you may say, "FY 2020" or "fiscal year ending Jun 30, 2020." Similarly, if you referred to government spending that occurred on Nov 15, 2019, you would label that as an expenditure for the fiscal year 2020.
