Definition of Fiscal Year | 12-month Period for Accounting and Taxes

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Fiscal Year Definition

Fiscal Year Definition

Fiscal year refers to a 12-month period that a business follows for accounting and tax purposes. It does not have to match the regular calendar year.

Expanded Definition

Several business entities have the option of following the traditional calendar year for accounting purposes, or they can opt to follow a fiscal year. A fiscal year is a 12-month period defined by a business to meet the needs of that business. Each business has a unique cycle of ups and down in terms of income and expenses. By choosing a financial period in their accounting system, business owners may be able to maximize the benefits of cyclical sales and related expenses.

Related Article:

Advantages of Adopting the Fiscal Year

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