Legal Definitions - accounting period

An accounting period is a specific length of time that is used for accounting purposes. It is a period of time that is used to determine income and related tax liability for a taxpayer.

For example, a company may use a calendar year as its accounting period. This means that all financial transactions that occur during the year will be recorded and reported on the company's financial statements for that year.

Another example is a fiscal year, which is a 12-month period that does not necessarily coincide with the calendar year. For instance, a company may choose to have its fiscal year run from July 1 to June 30.

The use of an accounting period allows for consistency and accuracy in financial reporting. It also helps to ensure that financial statements are prepared in a timely manner and that tax liabilities are accurately calculated.