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.|