FINANCIAL YEAR
Financial Year
A financial year (FY), also known as a fiscal year, is a 12-month period used by businesses, governments, and organizations to prepare financial statements and for budgeting purposes. The start and end dates of the financial year can vary depending on the organization or country.
Purpose of the Financial Year
- It standardizes financial reporting.
- The financial year provides a consistent timeframe for measuring and reporting financial performance.
- Budgeting is done based on the financial year.
- In many countries, the financial year is the basis for calculating taxes.
- Businesses and individuals are required to file tax returns for the previous financial year.
Benefits of a Consistent Financial Year
- Consistent and improved financial reporting
- Enhanced benchmarking for performance
- Simplified budgeting and forecasting
- Reduced compliance risks