Definition of the word financial year

The term "financial year" (often abbreviated as FY) refers to the period of 12 months during which a company or organization records its financial transactions and prepares its financial statements. It is commonly used in business and accounting contexts. The reasons behind the adoption of a financial year, as opposed to the calendar year, vary by country and region. In many parts of the world, a financial year begins on April 1st, which is known as the "fiscal year end," and ends on March 31st of the following year. This dates back to the British Empire, where the tax year in the United Kingdom was aligned with the fiscal year end of April to allow time for the preparation and submission of tax returns. In some other countries, such as the United States, the financial year typically ends on December 31st, aligning with the calendar year end. However, certain industries, such as fiscal-year federal agencies, may have different financial year-end dates set by statute. In summary, while the specific dates of the financial year can vary, the overall concept reflects a defined period during which a company maintains its financial records and reports to external stakeholders.