Revised: Mon April 12, 2021
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| What is Gregorian Calendar |
| What is 13 Period Calendar |
| Purpose of 4-4-5/4-5-4/5-4-4 Calendars |
| What is 53 Week Calendar |
The National Retail Federation has listed some of the following frequently asked questions concerning the 4-4-5, 4-5-4 and 5-4-4 calendars. These calendars are a method of managing accounting periods. They are a common calendar structure for some industries such as retail and manufacturing. Retail calendar intervals facilitate comparisons across years, because week definitions remain consistent from year to year.
These calendar methods create a 52-53 week fiscal year. A fiscal calendar (such as a 4-4-5 calendar) fixes each month at a specific number of weeks to facilitate comparisons from month to month and year to year. January always has exactly 4 weeks (Sunday through Saturday), February has 4 weeks, March has 5 weeks, etc. The 52-53 week method is permitted by generally accepted accounting principles in the United States, as well as by the US Internal Revenue Code (IRS Publication 538).
A Gregorian calendar is the typical calendar we use on a monthly basis. Each year has 12 months and the number of days in a month vary depending on the month.
In a 13 period calendar, a year has 13 periods and each period has 4 weeks. In a 13 period calendar, you do not have the quarter or half-year concept. Each year has 13 periods, each period has 4 weeks, and each week has 7 days. Each period in a 13 period calendar may still be called “month”, but the month has only 28 days.
These calendars serve as a voluntary guide for the retail industry and ensures sales comparability between years by dividing the year into months based on a 4-4-5/4-5-4/5-4-4 week format. Each quarter has 13 weeks which are grouped into two 4 week months and one 5 week month. The grouping of 13 weeks may be set in any of the three ways, but the 4-4-5 is the most common arrangement. The layout of the calendar lines up holidays and ensures the same number of Saturdays and Sundays in comparable months. Hence, like days are compared to like days for sales reporting purposes. In these calendars, each year has 12 month period, but the number of days in each period is not equal. You can do a week by week and quarter by quarter analysis, but period by period is only meaningful when comparing the data with the same period from a prior year, not comparing with the last period of this year. This calendar is actually a 13 week quarter calendar. The major advantage over a regular Gregorian calendar is that the end date of the period is always the same day of the week.
The difference between 13 period calendar and a 4-4-5 calendar is that the number of days in each period is equal in a 13 period calendar and thus you can do a period to period basis comparison and trending under the 13 period calendar.
In these retail calendars, each calendar is divided into four 13-week periods, based on one of the following formats: 4-4-5, 4-5-4, and 5-4-4. The first, second, and third numbers specify the number of weeks in the first, second, and third month of each period, respectively.
Due to the layout of the 4-4-5, 4-5-4 and 5-4-4 Calendars (52 weeks x 7 days = 364 days), which results in one remaining day each year, and the occurrence of Leap Year, it is sometimes necessary to add a 53rd week to the end of the calendar for sales reporting purposes only. This occurs approximately every five to six years, though this is not always the case. 1995, 2000, 2006, and 2012 are all 53-week years.
If, after laying out the entire 52-week calendar for any given year, there are four or more days left in January during the 53rd week, then a 53rd week is added. For instance, if you look at the 4-5-4 Calendar for 2004-2006, you will see that in 2005 there were only three days remaining in January after the 52nd week (January 29-31). However, in 2006 there are four days remaining in January, so a 53rd week is added on to the end of that year.
For comparability purposes, the National Retail Federation 4-5-4 Calendar restates a 53-week year in the subsequent year (ex. 2006 is restated for comparability to 2007). This is accomplished by pushing each week of the 53-week year back one week, thereby ignoring the first week of the fiscal year (in this example, 2006). The benefit in doing so is to align holidays, which naturally account for a significant percentage of retailers’ sales. The restatement is shown on the 2006-2008 4-5-4 Calendar. The first week of sales for 2006 begins on February 5, 2006 and ends on February 11, 2006 versus January 29 – February 4, 2006 on the 2005-2007 calendar. An alternative approach is to not restate and instead ignore the 53rd week of sales for comparability.
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