| Fiscal Year |
Article Index for Fiscal |
Website Links For Fiscal |
Information AboutFiscal Year |
| CATEGORIES ABOUT FISCAL YEAR | |
| generally accepted accounting principles | |
| taxation | |
| calendars | |
|
DISPARITY WITH THE CALENDAR YEAR Often the fiscal or tax year is specifically established not to match the calendar year so that accounting year-end work does not coincide with periods of high activity, such as the Christmas shopping rush for retailers, or with Holiday periods when employees may prefer to take vacation. A popular use of a non-calendar year as the fiscal year involves retailers. In many countries, at the end of December, levels of Inventory , Receivable s and Payable s will be higher than at other month ends and consequently more complex and time-consuming to measure accurately. Therefore, retailers commonly use a month other than December to end their fiscal year. January is a popular choice, since by the month's end activity levels will have fallen substantially. In addition, many companies find that it is convenient for purposes of comparison and for accurate stock taking to always end their fiscal year on the same day of the week, where local legislation permits. Thus some fiscal years will have 52 weeks and others 53. Major corporations that adopt this approach include Cisco Systems and Tesco . In the United Kingdom , a number of major corporations that were once government owned, such as BT Group and the National Grid , continue to use the government's fiscal year, which ends on the last day of March, as they have found no reason to change since Privatisation . Nevertheless, for about 65% of publicly traded companies in the United States and for the vast majority of large corporations in the UK and elsewhere, except in Australia , the fiscal year and calendar year are identical. Many University of Oxford fiscal year-end is July . OPERATION IN VARIOUS COUNTRIES Such fiscal years are typically numbered using a calendar year and quarter thereof. A fiscal quarter is 3 months (1/4 of a year). For example, the United States Government fiscal year for 2007 ("FY07", sometimes written "FY06–07") is as follows:
So the U.S. government's fiscal year begins on October 1 of the previous calendar year and ends on September 30 of the year with which it is numbered. Prior to 1976 , the fiscal year began on July 1 and ended on June 30 . The Congressional Budget And Impoundment Control Act Of 1974 stipulated the change to allow Congress more time to arrive at a budget each year, and provided for what is known as the "transitional quarter" from July 1 , 1976 to September 30 , 1976 . As stated above, the tax year for a business is governed by the fiscal year it chooses. The Australian Government 's fiscal year begins on July 1 and concludes on June 30 of the following year. This applies for personal income tax and the federal budget. In Canada , the United Kingdom , New Zealand , India and Hong Kong , the government's financial year runs from April 1 to March 31, and the United Kingdom Corporation Tax is charged by reference to that period. In the UK, the personal tax year (which governs liability to Income Tax and Capital Gains Tax ) runs from April 6 to April 5 . This reflects the old Ecclesiastical Calendar , with New Year falling on March 25 ('' Lady Day ''), the difference being accounted for by the eleven days "missed out" when Great Britain converted from the Julian Calendar to the Gregorian Calendar in 1752 (the British tax authorities, and landlords were unwilling to lose 11 days of tax and rent revenue, so under provision 6 (''Times of Payment of Rents, Annuities, &c.'') of the Calendar (New Style) Act 1750 , the 1752–3 tax year was extended by 11 days). From 1753 until 1799, the tax year in Great Britain began on 5 April , which was the " Old Style " new year of 25 March . A 12th skipped Julian leap day in 1800 changed its start to 6 April . It was not changed when a 13th Julian leap day was skipped in 1900, so the tax year in the United Kingdom is still 6 April . Ireland also used this year until 2001 when it was changed to match the calendar year (the 2001 tax year was 9 months, from April to December). Companies that are units within a "group" of businesses must all use nearly the same fiscal year (differences of up to three months are permitted in most jurisdictions, such as the U.S. and Japan ), with consolidating entries to adjust for transactions between units with different fiscal years, so the same resources will not be counted more than once or not at all. REFERENCES
|
|
|