What Is Fiscal Year‑End?
A fiscal year‑end is the last day of an entity’s 12‑month accounting period. It marks the close of the accounting cycle when financial results for the year are finalized, reported, and (for tax purposes) used to determine filing deadlines. A fiscal year may be the same as a calendar year (ending Dec. 31) or any other 12‑month period that a company, nonprofit, or government chooses.
Key takeaways
– Fiscal year-end = last day of an entity’s 12‑month accounting period.
– Companies choose fiscal year dates to match seasonality, industry practice, or budgeting cycles.
– Public companies publish annual financial statements and reports (e.g., Form 10‑K) after fiscal year‑end.
– For U.S. federal taxes, most fiscal‑year taxpayers file by the 15th day of the fourth month after their year‑end (with some exceptions).
– The U.S. federal government’s fiscal year runs Oct. 1–Sept. 30.
Understanding fiscal year‑end
A fiscal year (FY) is simply a 12‑month reporting period used for accounting, financial reporting, budgeting, and tax compliance. Businesses are typically free to set their fiscal year when they incorporate (subject to tax rules). Governments often set fiscal years to coordinate budgeting and tax collection.
Reasons companies choose non‑calendar fiscal years
– Seasonality: Retailers often end their FY after the holiday season (e.g., Jan. 31) to capture peak sales and give staff time to close books.
– Business cycle alignment: Resorts, agriculture, or other seasonal businesses select an FY that ends after their peak season.
– Industry practice: Some industries cluster reporting timelines to match peers and benchmark performance.
– Operational convenience: To avoid tying up staff during peak sales days or busy business periods.
Examples (public companies)
– Apple: FY ends on the last Saturday of September.
– Microsoft: FY ends on June 30.
– Walmart: FY ends on Jan. 31.
(These differing year‑ends mean analysts must align comparable periods when comparing companies.)
Fiscal year‑end vs. calendar year‑end
– Calendar year: Jan. 1–Dec. 31. Many personal tax years and some companies use this.
– Fiscal year: Any other 12‑month span, e.g., Feb. 1–Jan. 31 or Oct. 1–Sept. 30.
Impact: Different FYs mean financial reports cover different months; when comparing companies, align comparable months or use trailing‑12‑month (TTM) figures.
Tax deadlines (U.S. federal)
– General rule: A corporation whose tax year is a fiscal year must file the corporate tax return by the 15th day of the fourth month after the fiscal year‑end.
– Exceptions: S corporations and certain other corporations with fiscal year ending June 30 generally file by the 15th day of the third month after year‑end.
– Note: Entities using the calendar year generally file by the regular due date (e.g., April for many filers). Check current IRS guidance for specifics and updates.
What is the U.S. federal government’s fiscal year?
– U.S. federal FY runs October 1 through September 30. Federal budgeting and appropriations follow that schedule.
What happens at the end of a fiscal year?
At fiscal year‑end companies typically:
– Reconcile all balance sheet accounts (bank reconciliations, accounts receivable, accounts payable).
– Perform physical inventory counts and reconcile to accounting records.
– Record year‑end adjusting journal entries (accruals, deferrals, depreciation/amortization adjustments).
– Review fixed assets and impairment indicators.
– Calculate income, expenses, and make tax provision entries.
– Prepare and finalize financial statements (income statement, balance sheet, cash flow, changes in equity).
– Coordinate with auditors for annual audit or review.
– File regulatory reports (e.g., Form 10‑K for U.S. public companies) and tax returns.
– Close the books and roll forward to the new fiscal year.
– Analyze results vs. budget and create next year’s budget.
Practical year‑end checklist (step‑by‑step)
1. Plan early
– Set a year‑end timeline and assign responsibilities.
– Reserve staff and external resources (auditor, tax advisor) well in advance.
2. Reconcile accounts
– Bank reconciliations for all cash accounts.
– AR and AP reconciliations (identify overdue items, dispute items, and collectability concerns).
3. Inventory and fixed assets
– Perform a physical inventory and reconcile with records.
– Review fixed asset schedules for disposals, additions, and depreciation.
4. Adjusting entries
– Record accruals for unpaid expenses.
– Recognize deferred revenue and make revenue adjustments per accounting standards.
– Record impairment, provisions, or write‑offs if needed.
5. Tax and compliance
– Compute tax provisions and estimate liabilities.
– Gather tax information and documentation for return preparation.
– Note filing deadlines based on fiscal year‑end.
6. Financial statements and disclosures
– Prepare GAAP/IFRS financial statements and required footnotes.
– Draft management discussion & analysis (MD&A) and other regulatory narratives.
7. Audit and review
– Provide schedules and supporting documentation to auditors.
– Respond to audit queries and complete any required audit adjustments.
8. Close and communicate
– Close the books and roll forward.
– Distribute audited financials to stakeholders and file required reports (SEC filings, nonprofit filings, etc.).
– Conduct a post‑mortem to improve next year’s close process.
Choosing or changing a fiscal year‑end: practical steps
1. Evaluate business drivers
– Assess seasonality, supplier/customer cycles, and peak staffing periods.
– Review industry peers and investor expectations.
2. Consider tax and legal implications
– For U.S. businesses, adopting or changing a tax year may require IRS approval.
– To change a tax year you may need to file IRS Form 1128 (Application to Adopt, Change, or Retain a Tax Year) or follow automatic change procedures where available.
– Be aware of special rules for S corporations and other entity types (e.g., June 30 exception).
3. Operational readiness
– Ensure accounting systems, payroll, and reporting processes can support the change.
– Communicate with banks, lenders, investors, and regulators.
4. Governance and documentation
– Obtain board approval and document the decision in corporate records.
– File any required notifications with tax authorities or regulatory bodies.
5. Implement and monitor
– Execute the change at the chosen date.
– Monitor for one‑time transitional tax issues (short‑period tax returns) and update internal controls.
Practical steps for investors and analysts when companies have different fiscal year‑ends
– Align periods: Compare companies on a common time basis (calendar months or trailing‑12‑month figures).
– Use pro forma or TTM data where appropriate.
– Read footnotes: Companies disclose fiscal year‑end dates and any material post‑period events in annual reports.
– Watch for seasonality: A company reporting after its peak season may show unusually strong year‑end results.
Common pitfalls to avoid
– Comparing raw year‑end numbers for companies with different fiscal years without adjusting for timing.
– Forgetting additional filing requirements or short‑period returns when changing a fiscal year.
– Under‑planning staffing and audit resources for a year‑end close that coincides with busy business periods.
The bottom line
Fiscal year‑end is a pivotal date for financial reporting, tax filing, and operational planning. Companies select fiscal year‑ends to fit business seasonality, industry norms, and operational convenience. Year‑end requires careful planning and execution—reconciliations, adjusting entries, audits, tax provisioning, and stakeholder reporting—to produce accurate financial statements and meet regulatory obligations.
Practical next steps (for business owners or financial managers)
– Review whether your current FY aligns with your business seasonality and reporting needs.
– Build a year‑end calendar now that includes auditing, tax, and reporting deadlines.
– Engage your tax advisor before making or changing a fiscal year decision.
– Create a standardized year‑end checklist and run a dry‑close several weeks before the final day.
Sources
– Investopedia. “Fiscal Year‑End.” (Original source provided.)
– Internal Revenue Service. “When to File.” https://www.irs.gov/filing/when-to-file
– Internal Revenue Service. “What Is the Due Date for Business Income Tax Returns?” https://www.irs.gov/
– Internal Revenue Service. Publication 509 and current tax calendar resources. https://www.irs.gov/
– U.S. Securities and Exchange Commission. Company filings for Apple, Microsoft, and Walmart (Form 10‑K filings).
– U.S. General Services Administration (USA.gov). “The Federal Budget Process.” https://www.usa.gov/
If you’d like, I can:
– Create a ready‑to‑use year‑end checklist template tailored to your business type (retail, services, manufacturing).
– Walk through the IRS Form 1128 process for changing a tax year.
– Provide a comparison template for aligning financials of two companies with different fiscal years. Which would you prefer?