The fiscal year is a one-year period that businesses use to prepare their financial reports. The fiscal year does not coincide with the calendar year. Businesses may prepare their financial statements every quarter or every year. This does not usually affect how the business runs, but only how the business handles its financial reporting.
The annual statement for a particular fiscal year details the financial data of a business over 12 months. True to its name, quarterly statements divide the year into four parts. A quarterly financial report, therefore would detail the business' financial circumstances over a period of three months each. Throughout a fiscal year, a business would prepare one set of annual statements, four sets of quarterly statements or both.
Just like a normal calendar year, the fiscal year runs over 12 months. However, it does not begin on January 1st and end on December 31st, according to Nolo. The fiscal year usually ends on the last day of a month, which can be any month except December. If a business' fiscal year runs from April 1st to March 31st, its annual financial statement would run from April to March. In contrast, its quarterly statements would run from April to June, July to September, October to December and January to March.
Accountants would prepare the statements of a business quarterly or annually. They also have to carry out the balance forward process at the end of the fiscal year. This involves recording the ending balance of the old fiscal year as the beginning balance of the new year. The business also has to make various accounting adjustments to prepare for the new fiscal year. The business has to do this at the end of every annual statement or at the end of the fourth quarterly statement of the year.
Regardless of its accounting period choices, the business would prepare year-end statements at the end of the fiscal year. This would be either the annual statements or the quarterly statements of the last quarter of the year. If a business prepares both annual and quarterly statements, both its year-end statements should match. However, they may differ if the business changes the period of its fiscal year during the year, according to Long Island University.