Difference between fund flow statement and balance sheet and income statement

Difference between Fund Flow Statement and Balance Sheet

The main differences between fund flow statement and balance sheet are as under.

Basis of difference Fund Flow Statement Balance Sheet
Nature Fund flow statement is designed to show changes in financial position of an organization. Thus it is dynamic in nature. Balance sheet is to highlight financial discipline on a specific date and thus its nature is static.
Object The main object is to show various sources and uses of sources of a specific period. Balance Sheet shows changes of Assets and Liabilities of a specific period.
Interest Fund flow statement is useful to management for decision-making purposes. It is not used for decision making. It is used to study financial position of the organization.
Format It has no specific format. Fund flow statement cannot be prepared without schedule of change in working capital. Balance sheet is always prepared in a specific form.
Dependent on change in working capital. Fund flow statement cannot be prepared without Schedule of Change in Working Capital. Balance sheet does not need to go for schedule of change in working capital. It is dependent on Profit and Loss account.

Difference between fund flow statement and income statement

The following are the points of difference between fund flow statement and income statement.

Basis of difference Fund Flow Statement Income Statement
Object The main object to highlight the changes in financial position. The aim of income statement is to show profit and loss.
Means of sources It shows various sources of funds from where the funds are received and spent. It shows various expenses and income. Expenses are more than income, thus net loss.
Dependents It is dependent on income statement. It helps the preparations of fund flow statement. It cannot be prepared from the data of fund flow statement.
Format Fund flow statement is not prepared in a specified form. It may be in horizontal or vertical form. Income statement is prepared in a specified form. Trading, Profit & Loss Accounts with rules of double entry system of book keeping.
Benefits It is always for the benefit of top management. It is useful to shareholders or owners and Bankers.
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