For audit rule using a yearly Cumulative Amount, does period reset after 365 days or on Jan 1?

Summary: We are looking to configure an audit rule with a cumulative amount audit threshold (in task Manage Expense report Audit Rules by Template and Type). We want to flag any report for audit if an employee expenses over $500 to a certain expense type over a given year.

If we set it Cumulative Amount = $500, and Period = Year: Does the "calendar" reset on 1/1 of the new year? Or 365 days after the last report submission?

Content: For example, will it flag a report for audit if an employee submits a report with $400 booked to this expense type on 12/31 of this year and then another $400 on 1/2 of the next year?