BAQ Report filtering (Ver 8.03)

My final report will have a filters for the fields FiscalYear and FiscalPeriod.  

Does the BAQ need to return all years and periods, and then the report filters the ones to be displayed?

Or is there a way to have the filter values the user enters when running the BAQ Report, flow through to the BAQ?

It seems like it should be the later.  But it appears that the Phrase Builder in the BAQ designer only allows constants (or a value from another field) for filter criteria.