Calendar year, starting on the 1st January and ending on the 31st December is a period of time taken by the earth to make one revolution around the sun. On the other hand, the period that governments use for tax calculation, accounting and budget purposes, preparing financial statements is called financial or fiscal year.
In some countries, for example Croatia or Ireland, the financial year corresponds with the calendar year.
In the United Kingdom, the budget for a financial year covers the period from the 1st April to the 31st March. Most companies use the government’s financial year and the corporation tax is charged by reference to it, however companies can adopt any year as their accounting year. Personal tax, on the other hand, is calculated from the 6th April to the 5th April of the next calendar year.
In Australia and New Zealand a financial year starts on the 1st July and ends on the next 30th June, and it applies to the budget, to financial reporting and to personal income tax.
In the United States companies, as well as state governments can also choose any financial year that they want, but the federal government’s financial year, or fiscal year, as it is called in the USA, starts on the 1st October and ends on the 30th September.
In reports and other official documents financial or fiscal year is abbreviated as FY, which is combined with the specific year or years, commonly the year in which the financial year ends, for example FY 2016/2017, FY2017 or FY17. You may also come across the abbreviation EFY in a phrase such as “the proposed EFY 2016 grant”. It stands for the end of the financial year.
Autorica: Jasminka Šturlić, prof. engleskog i talijanskog.