Financial statements are prepared at regular intervals—usually monthly or quarterly—and at the end of each 12-month period. This 12-month period is called the fiscal year. The timing of the financial statements is determined by the needs of management and other users of the financial statements. For instance, financial statements may also be required by outside parties, such as bankers and shareholders if there are many. However, accounting information must possess the qualitative characteristic of timeliness—it must be available to decision makers in time to be useful—which is typically a minimum of once every 12 months.
Accounting reports, called the annual financial statements, are prepared at the end of each 12-month period, which is known as the year-end of the entity. Most companies’ year-ends are on December 31, though this may not always be the case.
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