Fiscal calendars, fiscal years, and periods
Let’s discuss fiscal calendars, fiscal years, and periods and how to use them for legal entities, fixed assets, and budgeting.
Fiscal calendars provide a framework for the financial activity of an organization. Each fiscal calendar contains one or more fiscal years, and each fiscal year contains multiple periods. Fiscal calendars can be based on a January 1 to December 31 calendar year, or on any dates that you select. For example, some organizations select a fiscal calendar that starts on July 1 of one year and ends on June 30 of the following year.
The fiscal year in Finance can be:
- Set to any length.
- Divided into any number of periods.
- Shared across multiple legal entities.
There is no limit to the number of fiscal calendars that you can create, and no limit to the number of fiscal years that can be created for a fiscal calendar.
Each fiscal calendar is independent of your organization and can be used by multiple legal entities in the organization. For example, an organization has eight legal entities. Five of them share the same fiscal calendar and three use different fiscal calendars. You can create one fiscal calendar for the five legal entities that share the same fiscal calendar, and then create separate fiscal calendars for the other legal entities, if needed.