A business prepares it financial results for a 12 month period except in exceptional circumstances, such as for their first or last year of trading.
The date they prepare their financial statements to is known as their accounting date.
Businesses can choose any accounting date. But it is generally accepted to choose an accounting date that is the end of a calendar month and some other logical reasons such as:
- They are self-employed in which case it is often simpler to match the tax year;
- To match the end of the calendar year 31 December.