What is an accounting period?

An accounting period is the span of time covered by a set of financial statements. For internal financial reporting, an accounting period is generally considered to be one month. A few firms compile financial information for a four-week period, so that they have 13 accounting periods per year.

A publicly-held company must report to the Securities and Exchange Commission on a quarterly basis, so the accounting period for its financial reports to the SEC span three months. If a set of financial statements cover the results of an entire year, then the accounting period is one year. If the accounting period is for a twelve month period ending on a date other than December 31, then the accounting period is called a fiscal year, as opposed to a calendar year.

Technically, an accounting period only applies to the income statement and statement of cash flows, since the balance sheet reports information as of a specific date. Thus, if an entity reports on its results for January, the header of the income statement says "for the month ended January 31," while the header of the balance sheet states "as of January 31."