The period for which a set of accounts or a tax return is prepared. For sole traders and non-limited partnerships this can be determined by the business itself, although in most cases it will be aligned to the tax year (6th April to 5th April) as this will simplify the tax calculation.
For Limited Companies the first accounting period will start from the date of incorporation to the last day of the incorporation month, one year ahead. For example if a Limited Company is incorporated on 15th July 2016 the first accounting period will be as follows:
15th July 2016 to 31th July 2017.
The first accounting period for a Limited company is therefore usually a little over 1 year but will be fixed to 1 year thereafter.