Accounting Reference Date
A specific date utilised as a reference point for financial reporting for incorporated businesses is referred to as an accounting reference date. ARD is the end date for the period of financial transactions, and events are included in a company’s financial statements. The accounting reference date is usually the conclusion of the firm’s financial year, although it can be any date the company selects. For example, if a company’s accounting reference date is December 31, all financial transactions and events between January 1 and December 31 of that year will be included in the company’s financial statements.
The accounting reference date is important because it helps ensure that financial statements correctly reflect a company’s financial status at a specific time. In certain countries, the accounting reference date is mandated by law, while companies can establish their accounting reference date in the UK. Therefore, companies must carefully assess their accounting reference date to ensure that their financial statements are accurate and up to date.
As long as your annual accounts are not already past due, you can change your accounting reference date by making your company’s financial year shorter or longer than 12 months. Such adjustments can only be made for the current financial year or immediately preceding it. Changing your ARD will also affect your annual accounts filing date (unless you are prolonging your first financial year) and your Corporation Tax accounting period.
The financial year can be shortened at any time and for any amount of time. However, you can only extend your financial year:
- Unless the company is under administration, the maximum period is 18 months.
- Unless the company is in administration, you are aligning dates with a parent company or subsidiary.
To change your ARD, complete and submit Companies House form AA01 online or by mail.