What is an accounting period?
- By Book Keeping Pros
- Sources checked 16 Oct 2026
Definition
An accounting period is the span of time a financial report or set of accounts covers, such as a month, a quarter or a year. A profit and loss statement shows results across the period, and a balance sheet shows the position on its last day. A financial year is one such period, with months and quarters inside it.
A business often works with more than one accounting period at the same time. Monthly or quarterly reports help the owner keep track during the year, and the year-end accounts cover the financial year as a whole. A report for a month takes in only that month's income and expenses, while a year-to-date report runs from the start of the financial year to the end of that month, so it matters which one you are reading.
Much of the bookkeeping work sits at the edges of each period. Before a period's reports are produced, its transactions need to be entered and its bank and card accounts reconciled. A business using accrual accounting also has to consider bills and sales that belong to the period but are documented after it ends, and payments that cover more than one period, such as a prepayment; your accountant can say how each should be recorded.
Once a period's reports have been used, entering or changing transactions dated in that period puts the reports out of step with the books. When an earlier period needs correcting, agree with your accountant how and where the correction is recorded.
In Australia
For companies, registered schemes and disclosing entities, section 323D of the Corporations Act 2001 sets the meaning of financial year. The first one starts on the day of registration or incorporation and lasts 12 months, or a period of no more than 18 months that the directors decide. Each later financial year starts where the previous one ended and is 12 months long, though the directors can make it shorter or longer by no more than 7 days. The section also sets out the conditions under which a later year can be less than 12 months, or a controlled entity's year can be shortened, or extended to no more than 18 months, so that it lines up with the entity that consolidates it.
For registered charities, the Australian Charities and Not-for-profits Commission (ACNC) uses the term reporting period for the period a charity reports to the ACNC on. It says charities generally report for 12 months, and that the standard reporting period is the financial year from 1 July to 30 June. A charity that uses a different accounting period has to request it as a substituted accounting period for its ACNC reporting, which it can do in the Charity Portal, and its Annual Information Statement is due 6 months after its financial year or substituted accounting period ends. These are charity reporting rules, not rules for businesses in general.
Worked example
| Report | Period it covers | What it shows |
|---|---|---|
| Profit and loss for March | 1 March to 31 March | Income and expenses for March only |
| Profit and loss for the quarter | 1 January to 31 March | Income and expenses for those months |
| Profit and loss, year to date | 1 July to 31 March | Income and expenses since the financial year began |
| Balance sheet at 31 March | A single date: 31 March | What the business owns and owes on that day |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Reading a year-to-date report as if it showed only the latest month.
- Producing a period's reports before its bank and card accounts are reconciled.
- Entering a backdated transaction into a period whose reports have already gone to the owner or a lender, without noting the change.
Related terms
Related service
Management and cash-flow reports
Monthly reports that show where the business stands.
Sources
- Corporations Act 2001, sections 9, 292, 296, 323D and 334
Federal Register of Legislation, Office of Parliamentary Counsel. Compilation No. 149, 19 September 2026, released 19 September 2026. Checked 16 October 2026.
Based on content from the Federal Register of Legislation at 16 October 2026. For the latest information on Australian Government legislation please go to https://www.legislation.gov.au. Licence: CC BY 4.0.
- Reporting period
Australian Charities and Not-for-profits Commission. Current at 16 October 2026, released 25 July 2023. Checked 16 October 2026.
© Commonwealth of Australia 2018 Licence: CC BY 4.0.
- Substituted accounting period
Australian Charities and Not-for-profits Commission. Current at 16 October 2026, released 25 July 2023. Checked 16 October 2026.
© Commonwealth of Australia 2018 Licence: CC BY 4.0.