Serving Windsor and Essex County
Fiscal year end
Businesses can have a year end that ends on a date other than December 31. For example, a business year could start on May 1 of one year and end on April 30 of the following year. This 12 month period represents a fiscal year. There are special income tax rules for unincorporated businesses that have fiscal years that do not end at December 31. (See the Link section).
Amortization (Depreciation)
The term amortization is often referred to in relation to mortgages. For a mortgage, it is the length of time that it would take to pay the mortgage in full. A mortgage with a 25 year amortization would require 25 years to pay of the full balance. In accounting it is also used for assets that have a usefull life of more than one year, such as a building. The cost of the asset (building) is expensed over a period of time as it will last several years. Depreciation was the terminology used, and many accountants and business people still use this term.
The income tax department uses the term "Capital Cost Allowance" when referring to capital assets, such as buildings, automotive equipment, office furniture and so on. Although it is basically the same as amortization, the tax department assigns assets to groups (classes) that have set rates for amortizing (expensing) their cost for income tax purposes.