ECL26500 - ECL example: no accounting period ending in the financial year, no accounting period ending within 3 months of the end of the financial year
As explained in [ECL22300], if there is neither an accounting period of a person ending in a financial year or an accounting period ending within 3 months of the end of the financial year, the relevant accounting period is to be taken as the person’s accounting period ending nearest to the start of the financial year.
Foxtrot Ltd has an accounting period of 01 March 2025 to 28 February 2026, with a UK revenue of £50m.
Foxtrot Ltd ceased to trade from 01 March 2026. It then resumed trading on 1 September 2026. Foxtrot Ltd’s next accounting period was from 1 September 2026 to 31 August 2027.
For the purpose of simplifying this example, we shall assume Foxtrot Ltd was carrying on a regulated activity for the entirety of the 2027 financial year despite ceasing to trade.
You will see that there is no accounting period ending within the 2026/27 financial year (1 April 2026 to 30 March 2027). There is also no accounting period ending within a period of 3 months of the end of the financial year (there is no accounting period ending during the period of 01 April 2027 to 30 June 2027).
Foxtrot Ltd therefore uses the accounting period ended 28 February 2026 for the relevant accounting period, as it is the accounting period which ends closest to the start of the financial year on 01 April 2026.