Bob GauvreauAsk Bob Gauvreau Questions Based On His Training

Understanding Corporate Year-End: Key Insights for Business Financial Reporting

29 Oct 2024 · 1 min

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The speaker (Bob Gauvreau) defines a corporate year end as a chosen 12-month reporting period required for corporations, explains that in Canada any year-end date may be selected (noting about 45% use December 31), and recommends choosing a non-December year end. He states that the year end triggers annual financial statement preparation (statement of income/activities, assets, liabilities, equity) and is tied to the corporate tax filing and remittance of reported activities to the government.

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So what is a corporate year end? A corporate year end is essentially first off, you're a corporate entity, so that is a given. But really what it is is a chosen 12 month period of time where reporting is required. So typically I would suggest that probably about 45% of businesses have a corporate year end date that's December 31st. But in Canada we have the option to choose any year end date. So I would highly recommend choosing any other year end date. So whether It's December or June 30, a corporate year end is that 12 month period of time where we have to do reporting of the profitability, assets, liabilities and equity that was involved in that change during that period of time. So this corporate year end usually involves financial statement preparation, which again is the statement of activities of income, assets liabilities, statement of equity, and then that is included as part of a corporate tax filing. So we remit to the government all of the activities that happen during that period. So when we think of a corporate year end, it includes all of those components and is required on an annual basis.