What Does Semiannual Mean? | Examples, Summary

In a business environment, semiannual is something that is recurring like payments or an interest rate. It can sometimes be used to convey a ... Home/SustainableInvesting/ Payroll/ WhatisSemiannual? WhatisSemiannual? CarbonCollective March24,2021 Semiannual(sometimeswrittenassemi-annual),alsoknownasbi-annual,iswhenaneventoccurstwiceayear,everysixmonths. WhatDoesSemiannualMean? Inabusinessenvironment,semiannualissomethingthatisrecurringlikepaymentsoraninterestrate.Itcansometimesbeusedtoconveyaspecificeventsuchasaconventionormeeting. Whenlookingattheinterestrateonsecuritiesthatarebeingreceivedorissued,itcanhaveasubstantialimpactonhowtheorganizationevaluatestheriskmanagementanddecisionsgoingforward. Businesscanstatepaymentperiods,loans,ormeetingsassemi-annually.Acompanycanissuereportsontheirfinancialstatementssemi-annually. SemiannualversusBiennial Semiannualandbiennialaresometimesconfusedwitheachother.Semiannualdescribesaneventthathappenstwiceayear.Abiennialeventhappenseveryotheryear.Biennialisoftenconfusedwithbi-annual,whichmeansthesamethingassemi-annual,itissomethingthathappenstwiceayear. SemiannualExamples Example1–Loanrepayment Asemi-annualloanpaymentstartingon1January2019wouldrequirethefirstpaymenton1Januaryandon1July. Example2–Interestrate Interestissometimesstatedforsixmonths.Ifasemi-annualinterestrateof6%iscalculatedperyear,itwouldmeanthattheoverallinterestratethatyouwillpayis12%. Let’slookatJane’sTravel,Janeborrows$100,000fromthebankwitha6%semi-annualinterestpayment. Tocalculatetheinterestperyearyouwouldmultiplytheinterestbytwo,whichresultsinatotalannualinterestof$12,000. Example3–Interestrepayment MarkownsaconstructioncompanycalledWeBuild.Mark’scompanyoftenpurchaseslargeamountsofinventorytofillconstructiondemands.Markcurrentlydoesnothavethemoneytopayfortheneededmaterialstomeethisrequests.Markdecidestotakeoutaloantocoverthecapitalthatheneedstofulfiltheorders. Markisgrantedaloanwithacompoundinterestrate,andtheinterestrateispayablesemi-annually.Thismeansthatthecompoundinterestrateiscalculatedonthebasesoftheprincipaladdedwiththeresultsofthecompoundinterestratefromthepreviousterm’scalculation,andthiswillhappentwiceayear. Marksetsupanorganizationalmeetingsemi-annuallytodiscusstheloanwithotherstakeholders.Seeingthatthemeetingissetsemi-annual,itwilloccurtwiceayear. Example4–Bondinterest Aten-yeargeneralobligationbondwasissuedbyOhioPtyLtdinJanuary2019,thebondwillpayinterestonasemi-annualbasisuntilthematurityofthebondinDecember2029. Investorswhopurchasethebondswillreceiveinterestpaymentseverysixmonthsforthetimeperiod.Inthisexample,interestwillbepaidtoshareholderson30Juneand31Decembereveryyearuntilthematurityofthebond. OhioPtyLtdwillhavetopublishasemi-annualreportonitsfinances. Example5–Dividendpayments Companiesthatpaydividendscanpaydividendsonasemi-annualbasis;dividendswillthenbepaidtwiceayear.Businessescandecidehowtheywouldliketopaydividendstotheirshareholders,theydohavetheoptiontopaynodividends. SamsCorporationdecidestomakeasemi-annualdividendpaymenttoitsshareholders.TheshareholderswillthenreceiveadividendpaymenttwiceayearfromSamsCorporation.ThepaymentswillbemadeinJuneandDecembereachyear.SamsCorporationdecidestopublishtheirfinancialstatementonasemi-annualbasistocoincidewiththedividendpayments. SemiannualConclusion Semi-annualisalsoknownasbi-annual,iswhenaneventoccurstwiceayear,everysixmonths. Inabusinessenvironment,semiannualissomethingthatisrecurringlikepaymentsoraninterestrate. Semiannualandbiennialaresometimesconfusedwitheachother.