Calendar year definition

What is a Calendar Year?

A calendar year is a twelve-month period that begins on January 1 and ends on December 31. It is based on the Gregorian calendar, and is used in most countries to plan social and business events. The calendar year is the basis for numerous tax filings. It tends to be the default fiscal year for entities that have not specifically established a different date range for their fiscal years.

The Leap Year Cycle

Every four years, an extra day is added to February to account for the approximately 365.25 days Earth takes to orbit the Sun. This makes the year 366 days long in a leap year.

FAQs

Do Public Companies Have to Use the Calendar Year?

Public companies are not required to use the calendar year for financial reporting. They can adopt a fiscal year that better aligns with their operational cycle, such as a retail company using a fiscal year ending in January after the holiday season. However, they must disclose their chosen reporting period in their filings and apply it consistently.