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Fiscal Year (FY)

Candlefocus Editor
Fiscal Year (FY) is an accounting period of twelve months used by companies to analyze and report their financial activities. It is the standard time frame by which a company evaluates its financial performance and plans its budget. Companies typically choose a non-calendar fiscal year that fits their business cycles and the nature of their revenue, such as if a company’s business cycle coincides with the seasons. For example, if a company’s fiscal year ends on June 30th, the company would consider April, May and June for the first quarter of that fiscal year.

It is important for companies to maintain fiscal years due to their need to fit financial reporting and taxation deadlines. Financial reports and external audits are often based upon a company’s fiscal year. Furthermore, companies must provide their federal tax filing form for the IRS on the basis of their fiscal year.

Companies often use the same fiscal year for each of their departments, but sometimes a company may use different fiscal years for different departments. Doing this helps ensure that the information from one department fits into the overall financial plans of the company. It is also important to note that companies must retain fiscal years in order to maintain accurate financial records and compare the performance of the company over multiple fiscal years.

In conclusion, fiscal year (FY) is an accounting period of twelve months used by companies to analyze and report their financial activities. It is the standard time frame by which a company evaluates its financial performance and plans its budgets. Financial reports, external audits and federal tax filings are all based on a company’s fiscal year. Companies must maintain their fiscal years in order to fit the financial reporting and taxation deadlines, and to maintain accurate financial records.

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