In the field of finance – accounting, there are many difficult terms that not everyone can understand thoroughly. Especially those who are less interested in economic and social development.
Viewing: What is a fiscal year
So, the following article we will help you learn what the financial year concept is. Also, grasp how this budgetary fiscal year is calculated in some other countries around the world.
Fiscal year is the accounting period for businesses or governments.
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What is a financial year?
Fiscal year is the accounting period for businesses or governments. Normally, every year, businesses – organizations have to make financial statements or tax returns once. Therefore, the length of the fiscal year will be equivalent to the solar calendar.
However, this time period in countries can still deviate from the positive year. The reason is that the complicated financial review work often coincides with the busy business time of the year end and the employee’s holiday. Therefore, enterprises need to arrange a suitable accounting schedule for the previous fiscal year’s revenue to avoid affecting work efficiency.
How to calculate the financial year of some countries in the world
Most countries around the world calculate their financial years based on the common calendar year. However, some countries still have their own way of applying in accordance with their economic situation, such as:
In Vietnam, the budget year will be calculated according to the solar calendar, starting on January 1 and ending on December 31 every year. For businesses with a specific operating structure, it is possible to choose an annual accounting period that deviates from the calendar year. However, this work requires the permission of the Ministry of Finance. Usually, this period will last for about 12-15 months as prescribed.
In the United States, the fiscal year, also known as the tax year, will begin on October 1 of each year. and ends on September 30 of the following year.
In Australia the accounting period for business or government will start from 1 July each year. The cycle will then end on June 30 of the following year.
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For countries including Canada, UK, India, Japan and Hong Kong. The fiscal year is calculated from April 1 of each year until March 31 of the following year.
In the Netherlands, China, Korea, Germany, France, Russia, Switzerland, Thailand, the budget year often coincides with the calendar year.
The calculation of the financial year of some countries in the world is different depending on the economic situation
Select the financial year of the new business
Organizations and enterprises can choose the fiscal year of the newly established business to coincide with the common calendar or change to a suitable separate calendar. However, you need to make sure the first date coincides with the first day of the quarter: April 1, July 1, October 1.
For newly established businesses, the budget year is determined right on the business registration file. But if you want to change to another fiscal, it can be calculated from the date of issuance of the registration certificate until the date of making the conversion.
In which, fiscal is a 12-month cycle, effective for annual estimates and final settlement reports of the state and enterprises. This concept is used in the equivalent of a financial year.
The deadline for submitting annual tax finalization dossiers of organizations or enterprises is the 90th day from the end of the fiscal year.
How to choose a financial year for a new business?
Above is the information shared on the topic of what the fiscal year is and how to calculate the fiscal year of countries.
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Hopefully, after the reference, you will have more necessary knowledge in the specific field of the economy. At the same time, you can be more confident if you have the opportunity to become a business owner in the future.
Tags: how to transfer profit and loss at the beginning of the financial year, invoice costs other than the fiscal year, invoices written in the wrong fiscal year
