Glossary

Fiscal year

Definition

A fiscal year is the accounting period, usually twelve months, for which a business prepares its annual financial statements and closes its books. It does not have to match the calendar year: many companies use 1 April to 31 March or 1 July to 30 June. The year-end date drives closing, audit and tax deadlines.

How it works

Businesses choose fiscal years for practical reasons: to close after the busy season (retailers often end in January or February), to match a parent company or tax year, or to give the finance team a quieter month for the year-end close. First and last years can be shorter or longer than twelve months when a business starts or changes its year end, subject to local law.

Each fiscal year has its own entries, numbering and closing. At year end, income and expense accounts are closed to retained earnings, and an opening entry carries balance sheet balances into the next year.

In Ledgeriano each business sets its own fiscal year start and end, so companies in one group can keep different year ends. The year-end closing guide explains the full process.

Example: common fiscal years

Fiscal years are usually named after the year in which they end.

Example: common fiscal years
Start	End	Name	Typical users
1 Jan 2026	31 Dec 2026	FY2026	Most companies
1 Apr 2026	31 Mar 2027	FY2027	Many UK, Indian and Japanese companies
1 Jul 2026	30 Jun 2027	FY2027	Many Australian companies
1 Feb 2026	31 Jan 2027	FY2026 or FY2027	Retailers

Related terms

Lock date
A lock date blocks new entries, edits and postings on or before a chosen day. It protects periods that have been reported, filed or audited.
Closing entry
A closing entry brings revenue and expense accounts to zero at year end and moves the net result to equity. In Ledgeriano it runs through the income summary into retained earnings.
Opening entry
The opening entry starts a new fiscal year with the closing balances of assets, liabilities and equity from the previous year. Ledgeriano writes it automatically when a year is closed.
Retained earnings
Retained earnings are the accumulated profits a business has kept rather than distributed to owners. Each year's profit or loss is added to them at closing.
Adjusting entry
An adjusting entry is recorded at the end of a period to bring balances up to date, for example accrued expenses, prepaid amounts or depreciation. It makes the statements follow the accrual basis.

Guides

Year-End Closing Entries: How to Close the Books and Open the Next Year

Back to the glossary

FAQ

Questions about Fiscal year

Can I change my fiscal year end?

Usually yes, with notice to the company registry and tax authority. It creates one short or long transition period, which must be disclosed in the statements.

Is the fiscal year the same as the tax year?

Often, but not always. Personal tax years are fixed by law in many countries, while companies can usually choose their accounting year end.

Put the terms to work

Post a balanced entry, run a trial balance and close a year in a real ledger. New accounts get free credits to get started.

Create a free account→See all features→