Accounting Reference Date (ARD)

Definition§

An Accounting Reference Date (ARD) is the date at the end of an accounting reference period for a company, typically marking the end of its financial year. This date is crucial in financial reporting as it denotes the timeframe for which financial statements are prepared. For companies incorporated after April 1, 1990, the ARD is usually the last day of the anniversary month of the company’s incorporation. Any changes to this date must be notified to Companies House in advance.

Examples§

1. Example 1: A Newly Incorporated Company
   If a company incorporates on May 15, 2023, its initial ARD would typically be May 31, 2024, marking the first accounting reference period.

2. Example 2: Changing the ARD A company with an ARD of June 30th files a notice to Companies House to change it to December 31st, extending its accounting reference period to align its financial year-end with the calendar year.

Frequently Asked Questions (FAQ)§

What is an Accounting Reference Date (ARD)?§

The ARD is the date marking the end of an accounting period, usually indicating the end of a company’s financial year.

How is an ARD determined?§

For companies incorporated after April 1, 1990, the ARD typically falls on the last day of the month of the company’s incorporation anniversary.

Can a company change its ARD?§

Yes, a company can change its ARD, but it must notify Companies House in advance of the intended change.

Why is the ARD important?§

The ARD is fundamental for financial reporting as it defines the period for which financial statements are prepared, ensuring consistency in annual financial data reporting.

How can a company notify Companies House about changing its ARD?§

A company can notify Companies House by filing the appropriate form, such as Form AA01 (Change of accounting reference date).

Related Terms§

Financial Year§

A 12-month period for which financial statements are prepared, which may or may not align with the calendar year.

Companies House§

The UK’s registrar of companies, where incorporated companies must file various documents, including notifications of changes to their Accounting Reference Date.

Accounting Period§

A span of time (often a fiscal quarter or year) over which a company reports its financial performance.

Online References§

1. Companies House: Changing Your Company’s Accounting Reference Date
2. Investopedia: Financial Year
3. Financial Times: Definition of Accounting Reference Date

Suggested Books for Further Studies§

1. “Accounting for Non-Accountants” by Wayne Label

   • A simplified guide to understanding basic accounting principles.

2. “Financial Accounting: An Introduction to Concepts, Methods, and Uses” by Roman L. Weil and Katherine Schipper

   • An in-depth resource on the fundamentals of financial accounting.

3. “Accounting: Tools for Business Decision Making” by Paul D. Kimmel, Jerry J. Weygandt, and Donald E. Kieso

   • A textbook designed for those entering the world of accounting, covering a broad range of essential topics.

Accounting Basics: “Accounting Reference Date (ARD)” Fundamentals Quiz§

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