It is commonly referred to as a fiscal year or budget year and is utilized for financial statement calculations in various businesses and organizations. The fiscal year may align with the calendar year or differ from it.

For tax purposes, companies can opt to be either calendar-year taxpayers or fiscal-year taxpayers, depending on the jurisdiction. In many jurisdictions, regulatory laws concerning accounting and taxation mandate such reports to be filed once every twelve months. However, it is not obligatory for the period to coincide with the calendar year, typically from January 1 to December 31.

A fiscal year typically commences at the start of a quarter, such as April 1, July 1, or October 1. Nonetheless, many companies choose to synchronize their fiscal year with the calendar year, beginning on January 1, as it simplifies accounting processes. However, some organizations find advantages in commencing the fiscal year at different times.

For instance, seasonal businesses may initiate their fiscal year on July 1 or October 1. Similarly, a business with predominant income in the fall and significant expenses in the spring might opt to start its fiscal year on October 1. This enables them to anticipate their yearly income and adjust expenses accordingly to maintain desired profit margins.