A corporation’s fiscal year refers to the 12-month period it uses for financial and tax reporting purposes when a calendar year isn’t used. Initially, a corporation can choose any fiscal year it wants, but it must maintain its books and records in accordance with that fiscal year. If you want to determine the fiscal year that a company uses, the information is readily available if the company is publicly traded. Private corporation fiscal years, however, can be a little more difficult to determine.
Choosing Fiscal Year
Since a corporation is treated as a separate taxpayer, it must obtain an employer identification number, or EIN, with the IRS in order to file its taxes. Corporations can choose a tax year at the time of applying for the EIN, but the IRS doesn’t consider a corporation’s tax year as being officially adopted until it receives the first corporate tax return. However, when corporations use a fiscal year for financial reporting that doesn’t end on December 31, its tax year must match the fiscal year. Therefore, when you’re able to determine a company’s fiscal year, barring unusual circumstances, its tax year should cover the same period.
Public Company Information
Federal law requires all public corporations that have their stock trading on a public exchange within the U.S. to register with the U.S. Securities and Exchange Commission (SEC). Once registered, a corporation has a legal obligation to publish audited financial statements. Whether it’s a quarterly or annual financial statement, the published statement will clearly state what the corporation’s fiscal year is. There are various resources available for accessing a corporation’s financial statements. The SEC maintains the “EDGAR database” on its website that stores all financial statement filing for every public company. But since the information is public, you can usually find the statements in other places, such as one of the many financial news organization websites.
Private Corporation Financials
It gets a little more complicated when you're trying to determine the fiscal year of a private corporation. Private corporations can range from a small business with just one or two shareholders to multimillion-dollar corporations. Since these corporations don’t raise capital from the public by having their stock listed on a public exchange, they’re under no obligation to make any financial information available to the public. Generally, only government agencies like the IRS and private creditors of the corporation will have access to that information.
Accessing Private Corporation Information
There are resources available online, some of which may require a premium subscription, which store financial information for large private corporations. Dunn & Bradstreet is one of the more popular firms that offer private company information. And if the company you want information on has a contract with a government agency, you may be able to extract fiscal year information from the government contractor database. If all else fails, you can always try and reach someone at the company, though business owners may not always be so willing to divulge any information.
References & Resources
- IRS: Publication 538: Accounting Periods and Methods
- IRS: Publication 542: Corporations
- U.S. Securities and Exchange Commission: The Investor's Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation
- The Library of Congress: Private Company Research
- U.S. Small Business Administration: Federal Procurement Database Systems - Next Generation