Short year

Short years are fiscal years that are shorter than the originally-defined fiscal year. You need to use the short year-end close procedure (instead of the normal year-end closing procedure) when the fiscal year for your company must be revised and ended earlier than previously defined.

Example

Company 123, which has a fiscal year running from January 1st through December 31st is purchased by company ABC, which has a fiscal year that runs from June 1st through May 31st. Therefore, company 123 must change its fiscal year to match its new parent company's. To do this, company 123 must close its current fiscal year on May 31st, seven months earlier than the predefined December 31st date. To do this, company 123 must conduct a short-year close.