Final answer:
The statement is true; a joint venture can have a fiscal year that does not coincide with the fiscal years of the ventures. Decisions about the fiscal year are made based on various factors like operational convenience, tax considerations, or regulatory requirements.
Step-by-step explanation:
The statement 'The fiscal year of a joint venture need not coincide with the fiscal years of the ventures' is true. A joint venture is a business arrangement where two or more parties come together to undertake a specific project or business activity. Each of these parties, known as venturers, may have different fiscal year periods for their respective companies, and these do not have to align with the joint venture's fiscal year.
For instance, if a joint venture is formed between Company A with a fiscal year ending December 31 and Company B with a fiscal year ending March 31, the joint venture itself could have a fiscal year that differs from both Company A and Company B. Decisions about the joint venture’s fiscal year are typically made based on operational convenience, tax considerations, or regulatory requirements specific to the joint venture.
It is important to recognize that the flexibility in selecting a fiscal year can be beneficial for reporting purposes, tax planning, and aligning the business cycle of the joint venture with industry standards or the preferences of the joint venture partners.