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What is an Accounting Period?

An accounting period is a specific time frame from which documents and records have been used by accountants to arrive at reported balances and statements.

An accounting period can be a fiscal year, quarter, or month, or any other time frame for which reporting is being done. At any given time, there may be different accounting periods running. Books are kept and reports are made for different tiers of accounting periods.

Each period could have specific standards and practices associated with how to treat different line-items, and how to carry balances from specific accounts forward, if at all. The fiscal year of a business is one such accounting period. Some businesses treat the fiscal year as 52 weeks from January – December, while some use July – June, or October - September.

International Financial Reporting Standards (IFRS) and GAAP support the use of a 52-week year instead of the actual calendar year, and each quarter is a 13-week accounting period. The months that are used within the 13 week quarter are often kept on the books as two 4-week months and one 5-week month, instead of using the calendar months.

Due to leap years and the year-end practice of keeping the end of the year one the same day of the week, such as a Saturday, every four years or so will be a 53-week fiscal year. This is known as the 52-53 Week year, and is permitted by GAAP and the IRS.

Not all companies use this method, however, and in most American companies, the fiscal year is basically the same as the calendar year.

What is Profit and Loss (P&L) Statement?
What are Accounting Policies?

Keywords: accounting, Generally Accepted Accounting Principles (GAAP), IFRS, quarterly review, IRS, business financial reports, fiscal year, 52-53 week year, 4-4-5 calendar, 13-week quarter,