Fiscal Quarter

Fiscal Quarter Definition

A fiscal quarter refers to the period of three consecutive months of any of the fiscal year which the company uses to report the results of its business. The same is vital for the publically traded companies as they are required to present specific information on an ongoing basis to the Securities and Exchange Commission concerning its quarterly performance in form 10-Q.

Fiscal Quarter Examples

The following are examples of this concept to understand it in a better manner.

Example #1

“A ltd” is the publicly held company which is manufacturing and selling the automobile products in the market. Suppose the company chooses the fiscal year to be the same as the calendar year, then what will be the fiscal quarters and the fiscal year for the year 2019?

Solution

A fiscal quarter refers to the period of three consecutive months of any of the fiscal year which the company uses to report the results of its business. In the present case fiscal quarter, one will start on 01st January 2019 and will end on 31st March 2019, quarter two will start on 01st April 2019 and will end on 30th June 2019 and the quarter three will start on 01st July 2019 and will end on 30th September 2019. Also, as the fiscal year is the same as the calendar year, so the fiscal year will start on 01st January 2019 and will end on 30th December 2019.

Fiscal Quarter

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For eg:
Source: Fiscal Quarter (wallstreetmojo.com)

Example #2

Company B ltd is the publicly traded companyPublicly Traded CompanyPublicly Traded Companies, also called Publicly Listed Companies, are the Companies which list their shares on the public stock exchange allowing the trading of shares to the common public. It means that anybody can sell or buy these companies’ shares from the open market.read more that conducts the business of manufacturing and selling the garments in the market. The company wishes to keep both the calendar year and fiscal year separately and decided to start the fiscal year from July 01, 2019. In that case, what will be the fiscal quarters and the fiscal year for the company for the year 2019?

Solution

A fiscal quarter will be three consecutive months of any of the fiscal year as decided by the company to report the results of its business and meet the other requirements. In the present case fiscal quarter one will start on July 01, 2019, and will end on September 30, 2019, quarter two will start on October 01, 2019, and will end on December 31, 2019, and the quarter three will start on January 01, 2019, and will end on March 31, 2019. Also, the fiscal year, in this case, will start on July 01, 2019, and will end on June 30, 2019.

Fiscal Quarter Advantages

The following are the different advantages –

Disadvantages

The following are different disadvantages –

  • The companies have to submit various details of the company to the concerned authority for every fiscal quarter. This increases the burden on the company and increases the pressure as the companies have to deliver the short term results in due time for the use of the stakeholders. If there is no fiscal quarter and no reporting is there, then the company could invest the same time in achieving its long term goals.
  • According to some laws, some information is required to be followed as per the calendar year quarter, so the following quarters as per both calendar year, as well as fiscal year, becomes difficult.

Important Points

The following are different vital points –

Conclusion

It is three consecutive months of any of the fiscal year as decided by the company to report the results of its business and meet the other requirements. It is the management of the company who has to decide that from when the fiscal quarter will start.

The concept of the fiscal year is not compulsory in case of the privately-held organizations because they are not required to file Form 10-Q and Form 10-KForm 10-KPublic firms in the United States of America file Form 10-K. It is a detailed statement of the company's annual financial performance that is filed with the Securities and Exchange Commission (SEC) within 60 days of the end of the fiscal year.read more with the Securities and Exchange Commission. However, the same is vital in case of the publicly traded companies, as they have to submit Form 10-Q for each of the first three fiscal quarters of the fiscal year to the Securities and Exchange Commission within a specified time as provided from the end of a fiscal quarter.

This has been a guide to Fiscal Quarter and its definition. Here we discuss examples of the fiscal quarter along with its purpose, advantages, and disadvantages. You can learn more about accounting from following articles –

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