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The 4–4–5 calendar is a method of managing
accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...
periods, and is a common calendar structure for some industries such as
retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and t ...
and
manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...
. It divides a year into four quarters of 13 weeks, each grouped into two 4-week "months" and one 5-week "month". The longer "month" may be set as the first (5–4–4), second (4–5–4), or third (4–4–5) unit. Its major advantage over a regular calendar is that each period is the same length and ends on the same day of the week, which is useful for planning manufacturing or work shifts. A disadvantage is that comparisons or
trend analysis Trend analysis is the widespread practice of collecting information and attempting to spot a pattern. In some fields of study, the term has more formally defined meanings. Although trend analysis is often used to predict future events, it could be ...
by "month" are flawed, as one month is 25% longer than the other two (whereas comparisons between weeks or to the same "month" in the previous year are still useful). Another disadvantage is that the 4–4–5 calendar has only 364 days (7 days x 52 weeks), meaning a 53rd week must be added every five or six years: this can make year-on-year comparison difficult.


52–53-week fiscal year

A variation is the 52–53-week. It is used by companies that want their fiscal year to always end on the same day of the week. Any day of the week may be used, and Saturday and Sunday are common because the business may more easily be closed for counting inventory and other end-of-year accounting activities. There are two methods permitted by
generally accepted accounting principles Publicly traded companies typically are subject to rigorous standards. Small and midsized businesses often follow more simplified standards, plus any specific disclosures required by their specific lenders and shareholders. Some firms operate on th ...
in the United States, by US
Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 ...
Regulation 1.441-2 IRS Publication 538., as well as the
International Financial Reporting Standards International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's f ...
.IAS 1 Presentation of Financial Statements


Last Saturday of the final month

Under this method, the company's fiscal year is defined as the final Saturday (or other day selected) in the fiscal year end month. For example, if the fiscal year end month is August, the company's year end could fall on any date from August 25 to August 31. In particular, the last fiscal week is the one that includes August 25 and the first fiscal week of the following year is the one that includes September 1. In this scenario, fiscal years would end on the following days: * * * * * * * * * * * The end of the fiscal year moves one day earlier on the calendar each year (or two days when there is an intervening leap day) until it would otherwise reach the date seven days before the end of the month (August 24 in this case) or earlier. At that point, it resets to the end of the month (August 31) or earlier and the fiscal year has 53 weeks instead of 52. On the above chart, fiscal years 2024 and 2030 have 53 weeks.


Saturday nearest the end of the final month

Under this method the company's fiscal year is defined as the Saturday (or other day selected) that falls closest to the last day of the fiscal year end month. For example, if the fiscal year end month is August, the company's year end could fall on any date from August 28 to September 3. In particular, the last fiscal week is the one that includes August 28 and the first fiscal week of the following year is the one that includes September 4. For Saturday, this ends up being equivalent to the week-date rule from
ISO 8601 ISO 8601 is an international standard covering the worldwide exchange and communication of date and time-related data. It is maintained by the Geneva-based International Organization for Standardization (ISO) and was first published in 1988, wi ...
which ensures that the first week of the year contains four or more days (i.e. its majority) of that year, which includes the first Thursday and January 4. In this scenario, fiscal years would end on the following days: * * * * * * * * * * * The end of the fiscal year moves one day earlier on the calendar each year (or two days when there is an intervening leap day) until it would otherwise reach the date four days before the end of the month (August 27 in this case) or earlier. At that point, the first Saturday in the following month (September 3 or earlier in this case) becomes the date closest to the end of August and it resets to that date and the fiscal year has 53 weeks instead of 52. On the above chart, fiscal year 2028 has 53 weeks.


See also

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Accounting period An accounting period, in bookkeeping, is the period with reference to which management accounts and financial statements are prepared. In management accounting the accounting period varies widely and is determined by management. Monthly account ...
*
Symmetry454 The Symmetry454 calendar (Sym454) is a proposal for calendar reform created by Irv Bromberg of the University of Toronto, Canada. It is a perennial solar calendar that conserves the traditional month pattern and 7-day week, has symmetrical equal ...


References

{{DEFAULTSORT:4-4-5 calendar Business terms Accounting systems Management accounting Specific calendars