Accounting Period 1
Definition
The period for which a business prepares its accounts. Internally, management accounts are usually produced either monthly or quarterly. Externally, financial statements are produced for a period of 12 months (interim accounts are often produced for the first six months), although this may vary when a business is set up or ceases or if it changes its accounting year end.
Example
Example 1:
Zenith Bank prepares its management accounts every month for internal decision-making, but publishes its full financial statements to shareholders once a year, that 12-month window is its accounting period.
Example 2:
Tesco produces full annual financial statements every 12 months, with an interim report at the six-month mark, giving investors a mid-year snapshot before the complete accounting period closes.