An accounting period is a defined timeframe, typically 12 months, during which a company records its financial transactions and prepares its financial statements for tax, compliance, and reporting purposes. In Ireland, companies must align their accounting periods with statutory filing requirements to ensure timely submission of annual returns and corporation tax computations.
An accounting period is the defined timeframe, typically 12 months, during which your company records all financial transactions and prepares its financial statements for tax and regulatory purposes. This period forms the basis for calculating profits, losses, and tax liabilities, ensuring compliance with Irish company law.
In Ireland, your first accounting period begins on incorporation and can last up to 18 months to align with a preferred financial year end. Subsequent periods are usually 12 months, though extensions or shortenings are possible with proper notification. The accounting period determines when you close your books and file with Revenue and the Companies Registration Office.
Choosing the right accounting period affects cash flow planning and compliance timing. Many businesses select 31 December to match the calendar year, simplifying personal and corporate tax cycles whilst aligning with common industry practices.
Your initial accounting period automatically starts on your incorporation date and ends on the last day of the month one year later, unless you notify the CRO otherwise. You can extend it up to 18 months or shorten it by filing Form B77 to set a preferred end date.
This flexibility allows alignment with natural business cycles, such as post-holiday periods for retailers. Early decisions prevent rushed first-year filings and establish a sustainable reporting rhythm for future years.
At period end, you finalise your financial statements, including the profit and loss account and balance sheet. These form the basis for your corporation tax return (CT1), due nine months later, and attachment to your subsequent annual return.
Accountants perform adjustments for accruals, prepayments, and capital allowances, ensuring accurate taxable profits. Missing this deadline risks losing audit exemptions for micro companies and triggers penalties.
Yes, you can change your accounting period by filing Form B77 with the CRO before the current period ends. Limitations apply, typically once every five years unless aligning group companies, preventing frequent shifts that disrupt reporting.
Shortening creates an interim period requiring additional filings, whilst extensions cannot exceed 18 months. Coordinate with your accountant to manage tax implications and CRO processing times.
Corporation tax for the accounting period is due nine months and one day after period end for most companies. Preliminary tax, estimated at 100% of prior year or 50% of current, must pay by day six of the ninth month to avoid tax interest.
Accurate period management prevents underpayment surprises and tax interest charges, preserving cash flow for growth.
Straddling periods require apportionment for tax computations, splitting income between years. This complicates filings but Revenue provides clear guidance. Professional advice ensures compliance whilst maximising reliefs like R&D credits.
Timely filing within nine months of accounting period end preserves micro company or small company audit exemptions. Late accounts trigger mandatory audits, escalating costs significantly for qualifying firms.
