Why would you pick 4-4-5 over 5-4-4 or over 4-5-4?

[OSAdmin]

Originally posted by Pascal De Schryver

10-17-17

Why would you pick 4-4-5 over 5-4-4 or over 4-5-4?

[OSAdmin]

Originally posted by Clarke Hair

My old company was 5-4-4 with 5-4-5 in the 5th year.  My new company is 4-4-5 with 4-5-4 in the fourth quarter (4-5-5 in 5th year).  In both cases the answer was Finance was convinced long ago by someone (mostly likely the lawyer/audit firm) working with them when they incorporated.  No logic behind either other than just two different thoughts on how to do it in the Accounting community.

The big reason to do is this to normalize costs over the months.  Much easier to analyze consistent # of days across months than 31-28-31-30-31-30-31-31....  Accountants like that better.  It also helps with closing the books as you set the date that is always month-end (ie Friday) and it does not change each period.

Clarke

[OSAdmin]

Originally posted by Hein Scholten

My experience is that most companies that use it want to make sure it's consistent YoY. But for some it can be driven by the calendar for the year at hand: The month that covers the largest part of the remaining week will get the 5. Can also be impacted by when holidays occur (Easter in March or April).