What is the fiscal year?

Fiscal year (definition)

A fiscal year is a 12-month accounting period that a business uses for financial and tax reporting purposes. A fiscal year is also known as a financial year.

A fiscal year can be different to a calendar year – it doesn’t need to start on January 1 and end on December 31. The dates of a fiscal year are determined by:

• A business’s activities – A retail business may have its busiest period during the holiday season which clashes with calendar year-end reporting, so it chooses other dates.
• Revenue cycle – A seasonal business like tourism or agriculture may choose a fiscal year that aligns better with its revenue and expenses.
• Tax reporting requirements – The government specifies these dates.

Fiscal years are named using the year when the period ends. For instance, a fiscal year that runs from 1 April 2023 to 31 March 2024 is called FY24. The tax year is an example of a fiscal year.