Fiscal Year is usually defined as a year or a period of twelve months for which a company creates financial statements and checks inventories or backlogs.
The fiscal year may match exactly to the calendar year, but this is not mandatory. Under some circumstances a fiscal year may also be less than twelve months that is shortened fiscal year.
A fiscal year is distributed into several posting periods. Each posting period has a defined start and a finish date. Before an individual can post documents, he/she must define posting periods for the document, which in turn define the particular fiscal year.
Further to the posting periods, one can also define special periods which are defined for year-end closing. In General Ledger Accounting, there are a maximum of twelve posting periods for a fiscal year and four special periods While in special ledger one can define upto 366 posting periods.
Fiscal Year is used in order to assign business transactions of a company to different time periods and can define a fiscal year with posting periods. Defining the fiscal year is unavoidable.
One can define fiscal year as fiscal year variants which then assign to one’s company code. One fiscal year variant can be utilized by numerous company codes.
There is the list of options available for defining fiscal year variants:
· Fiscal year which is same as calendar year
· Fiscal year which is different from calendar year that is non-calendar fiscal year. Posting periods and calendar months can also be different.
Generally accounting terms and topics are difficult to understand and requires a lot of concentration. Students pursuing accounts as a subject finds these terms and topics difficult to understand. So, they can take help of online accounting assignment help which provides not only support for their assignments but also improves basic knowledge and concepts of students.