What is an accounting period?

An accounting period is a time frame used by organizations to gather and prepare documents related to their financial activities. Accounting periods can come in many different frames of time, the most common is one fiscal year, however, companies might choose to break down accounting periods into smaller segments.

Here are some common accounting periods:

• Calendar year

• Fiscal year

• 4-4-5 calendar year

• Calendar quarter

• Fiscal quarter

• Calendar month

• Fiscal month

Here is a closer look at each of these different types of accounting periods:

• Calendar year

This type of accounting period takes place over the course of one year and starts on January 1st. It dictates that a company start collecting accounting records when the year begins and continue to do so until the year closes in December.

• Fiscal year

A fiscal year is a type of accounting period that records financial activity for 52 or 53 weeks. Normally, fiscal years begin at the start of a financial quarter, such as January or April. However, there is no strict start and stop date for a fiscal year and companies can choose how they want to structure them.

• 4-4-5 calendar year

This type of accounting period divides the accounting activities into four separate quarters, each lasting 13 weeks. This accounting period is normally used four times throughout a company's calendar year.

• Calendar quarter

Calendar quarters are a type of accounting period that begins at the start of a fiscal quarter and lasts for three months. Normally, this means that these accounting periods begin on either January 1st, April 1st, July 1st, or October 1st. Companies that use calendar quarters usually have more data to analyze because they create four separate accounting reports.

• Fiscal quarter

A fiscal quarter is an accounting period that lasts 13 weeks. Companies determine the start of their fiscal quarter by using the structure for their fiscal year. They then evaluate and schedule the organization's financial performance accordingly. Fiscal quarters represent the benefit of being able to choose a preferred start day for the accounting period.

• Calendar month

• Fiscal month

A fiscal month is an accounting period that lasts for four or five weeks and depends on how a company structures its fiscal year. The interesting aspect about fiscal months is that they don't have to start on the 1st of any given month. Just like a fiscal year, a company can choose whatever date it likes to structure its fiscal months.