What does the term 'financial year' refer to?

The term 'financial year' specifically refers to a 12-month period used for accounting purposes during which a company's financial performance is measured and reported. This period is crucial for businesses as it delineates when the financial statements, such as the income statement and balance sheet, are prepared. Companies use this timeframe to track revenues, expenses, and overall profitability, allowing for effective financial planning and comparison over different periods.

While the other options touch on relevant financial practices, they do not capture the essence of what a financial year is. The period for calculating gains and losses is a component of the financial year, but does not define the entirety of the term. The timeframe for filing annual taxes, while related, may differ from a company's financial year depending on regulations and business structure. Similarly, the period when financial audits are performed may not correspond directly to the financial year and is more about verification of reported figures rather than the actual accounting period itself. Thus, the definition tied to a 12-month accounting time frame captures the core meaning of 'financial year.'