Accounting Period (UK Taxation) - Mean Accounting Date

Mean Accounting Date

Some companies draw up financial statements to the same day of the week, a Sunday, say, each year. They will therefore have 364 day (52 week) or 371 day (53 week) periods of account. As long as the company draws its accounts up to within four days of a mean accounting date each year, it may, for the purposes of determining its accounting periods, deem its accounts to be drawn up for a twelve month period. For example, when there is a 371 day period of account, instead of having one accounting period of 365 days (in a non-leap year) and another of 6 days, it will prepare its return on the assumption that the period of account was 365 days long.

This method is related to the 4-4-5 Calendar of accounts, where a quarter is deemed to comprise two months of 4 weeks each and one month of 5 weeks, a total of 13 weeks or 91 days. In the United States the method is referred to as the 52-53 Week Fiscal Year and is approved for use under US Generally Accepted Accounting Principles (GAAP) and the Internal Revenue Code. See article under 4-4-5 Calendar for discussion of the US method application.