An accounting period, in

bookkeeping Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations. It involves preparing source documents for all transactions, operations, and other events of a business. Tr ...

, is the period with reference to which management accounts and financial statements are prepared. In

management accounting In management accounting or managerial accounting, managers use accounting information in decision-making and to assist in the management and performance of their control functions. Definition One simple definition of management accounting is th ...

the accounting period varies widely and is determined by management. Monthly accounting periods are common. In

financial accounting Financial accounting is the field of accounting concerned with the summary, analysis and reporting of financial transactions related to a business. This involves the preparation of financial statements available for public use. Stockholders, s ...

the accounting period is determined by regulation and is usually 12 months. The beginning of the accounting period differs according to jurisdiction. For example, one entity may follow the calendar year, January to December, while another may follow April to March as the accounting period. 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 ...

allow a period of 52 weeks as an accounting period instead of 12 months. This method is known as the 4-4-5 calendar in

British British may refer to: Peoples, culture, and language * British people, nationals or natives of the United Kingdom, British Overseas Territories, and Crown Dependencies. ** Britishness, the British identity and common culture * British English, ...

and

Commonwealth A commonwealth is a traditional English term for a political community founded for the common good. Historically, it has been synonymous with "republic". The noun "commonwealth", meaning "public welfare, general good or advantage", dates from the ...

usage and the 52–53-week

fiscal year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...

in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

. In the

the method is 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 ...

, as well as 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). In some of the ERP tools there are more than 12 accounting periods in a financial year. They put one accounting period as "Year Open" period where all the carried over balances from last financial year are cleared and one period as "Year Close" where all the transactions for closed for the same financial year. Older systems sometimes called these periods "Month 0" and " Month 13".

52–53-week fiscal year

The 52–53-week

(or 4–4–5 calendar) is used by companies that desire that their fiscal year 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 in use:

Last Saturday of the month at fiscal year end

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. Currently it would end on the following days: 2006-08-26 2006 August 26 2007-08-25 2007 August 25 2008-08-30 2008 August 30 (leap year) 2009-08-29 2009 August 29 2010-08-28 2010 August 28 2011-08-27 2011 August 27 2012-08-25 2012 August 25 (leap year) 2013-08-31 2013 August 31 2014-08-30 2014 August 30 2015-08-29 2015 August 29 2016-08-27 2016 August 27 (leap year) 2017-08-26 2017 August 26 2018-08-25 2018 August 25 2019-08-31 2019 August 31 The end of the fiscal year would move one day earlier on the calendar each year (two days in leap years) until it would otherwise reach the date seven days before the end of the month (August 24 in this case). At that point it resets to the end of the month (August 31) and the fiscal year has 53 weeks instead of 52. In this example the fiscal years ending in 2008, 2013, and 2019 have 53 weeks.

Saturday nearest the end of 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. Currently it would end on the following days: 2006-09-02 2006 September 2 2007-09-01 2007 September 1 2008-08-30 2008 August 30 (leap year) 2009-08-29 2009 August 29 2010-08-28 2010 August 28 2011-09-03 2011 September 3 2012-09-01 2012 September 1 (leap year) 2013-08-31 2013 August 31 2014-08-30 2014 August 30 2015-08-29 2015 August 29 2016-09-03 2016 September 3 (leap year) 2017-09-02 2017 September 2 2018-09-01 2018 September 1 2019-08-31 2019 August 31 The end of the fiscal year would move one day earlier on the calendar each year (two days in leap years) until it would otherwise reach the date four days before the end of the month (August 27 in this case). At that point the first Saturday in the following month (September 3 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. In this example the fiscal years ending in 2011 and 2016 have 53 weeks. The 52–53 week method is permitted by

in the United States, by US

Regulation 1.441-2 (IRS Publication 538)., as well as the

.IAS 1 Presentation of Financial Statements

References

{{Reflist

period Period may refer to: Common uses * Era, a length or span of time * Full stop (or period), a punctuation mark Arts, entertainment, and media * Period (music), a concept in musical composition * Periodic sentence (or rhetorical period), a concept ...

Accounting terminology Specific calendars