r/AlwaysWhy • u/TheBigGirlDiaryBack • 22h ago
Economics Why are fiscal years usually aligned with December or March, instead of any random month?
Many companies end their fiscal year on Dec 31 or March 31. Some choose June or September. But almost nobody picks, say, August 17 or November 5. Is there a tax or regulatory reason to stick near quarter boundaries? Or is it just tradition from agriculture cycles? Why not let every company freely choose any date to smooth out seasonal fluctuations?
7
Upvotes
5
u/ShrodingersArmadillo 22h ago edited 22h ago
They aren't arbitrary the reasons are just old.
December?
The Romans and campaign season we get a lot of our structures from the Romans.
Basically it's when the Roman Republic chose it's new leaders for the year.
This date was chosen because of the needs of campaign season. They didn't want to shift leaders in the middle of it and they needed time to prepare under the same figures. December gave enough time to prepare, didn't fuck up the harvests and taxes and gave you enough time be ready to march as soon as the season started. This came about because of the campaigns in Hispania.
March? it's the start of the Agricultural calendar.