What is a Reporting Period?
A reporting Period is the time span for which a company is reporting its financial performance on its financial statements.
A synonym for reporting period is accounting period
Reporting Period Example
For example, Company ABC follows a normal calendar year that starts on the 1st of January and ends on the 31st of December.
After the first 3 months, it could report the financial results for Q1, which is the first quarter of the year; namely, January, February and March. The reporting period here is one quarter, and that is Q1, and the end of the reporting period in this case is March 31.
How Long is The Reporting Period?
A company can set any time span. However; the most common lengths for reporting periods are:
- Month : e.g. Jan, Feb , March
- Quarter: e.g. Q1, Q2, Q3 and Q4
- Semi-anual: e.g. H1 and H2
- Annual: e.g. 2021, 2022
For annual reporting, a company could either follow a normal calendar year, that starts on the 1st of January, or it could set the start of its financial year to any date, and in this case it is called a fiscal year.
Why Do Businesses Follow This?
Businesses need to report annually to comply with regulations and pay their taxes.
Regular reporting within the year is also helpful for the company to analyze & manage its performance, and take any corrective actions if needed, before the year has ended.
This is particularly the case if the company has different stakeholders, e.g. investors, directors and managers, and they need such information to make decisions.
A standardized method that generates such reports for a standard time span enables those stakeholders to compare the results to similar periods from previous years.
It’s also important for budgeting to have historical data from previous years, so the new forecasts will be built based on them.