Accounting period

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This article is about the accounting period in bookkeeping. For the charge period of the United Kingdom corporation tax, see Accounting period (UK taxation).

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Accounting period in bookkeeping is the period with reference to which accounting books of any entity are prepared.

It is the period for which books are balanced and the financial statements are prepared. Generally, the accounting period consists of 12 months. However the beginning of the accounting period differs according to the jurisdiction. For example one entity may follow the regular calendar year, i.e. January to December as the accounting year, while another entity may follow April to March as the accounting period.

The International Financial Reporting Standards even allows a period of 52 weeks as an accounting period instead of a proper year.^[1]

In some of the ERP tools there are more than 12 accounting periods in a financial year. They put one accounting period as "Year Open" period where all the carried over balances from last financial year are cleared and one period as "Year Close" where all the transactions for closed for the same financial year.