Accounting Period

An Accounting Period is a period for which the accounting books of any entity are prepared.

• See: Internal Revenue Code, Bookkeeping, International Financial Reporting Standards, 4-4-5 Calendar, Fiscal Year, Generally Accepted Accounting Principles.

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References

2015

• (Wikipedia, 2015) ⇒ http://en.wikipedia.org/wiki/accounting_period Retrieved:2015-12-29.
  • An accounting period, in bookkeeping, is the period with reference to which accounting books of any entity are prepared.

    It is the period for which books are balanced and the financial statements are prepared. Generally, the accounting period consists of 12 months. However the beginning of the accounting period differs according to the jurisdiction. For example one entity may follow the regular calendar year, i.e. January to December as the accounting year, while another entity may follow April to March as the accounting period.

    The International Financial Reporting Standards allow a period of 52 weeks as an accounting period instead of a proper year. This method is known as the 4-4-5 calendar in British and Commonwealth usage and the 52–53-week fiscal year in the United States. In the United States the method is permitted by generally accepted accounting principles, as well as by US Internal Revenue Code Regulation 1.441-2 (IRS Publication 538).

    In some of the ERP tools there are more than 12 accounting periods in a financial year. They put one accounting period as "Year Open" period where all the carried over balances from last financial year are cleared and one period as "Year Close" where all the transactions are closed for the same financial year. Accounting is an art of recording classifying and summarising the financial positions of the company. It is done by the accountant.

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