Ideal Distinguish Between Fund Flow Statement And Cash Flow Statement
The major differences between cash flow statement and fund flow statement are as follows.
Distinguish between fund flow statement and cash flow statement. Inflows and outflows of cash and cash equivalents. The cash flow statement is created by following a cash basis of accounting. Though both of them are closely related their purposes are entirely different.
Cash flow refers to the current format for reporting the inflows and outflows of cash while funds flow refers to an outmoded format for reporting a subset of the same informationCash flow is derived from the statement of cash flowsThis statement is required under Generally Accepted Accounting Principles and shows the inflows and outflows of cash generated. Contains both opening and closing balances of cash and its equivalents. Cash flow is based on the concept of outflow and inflow of cash and cash equivalents during a particular period.
The primary difference between the two is that money available in physical form as a currency is termed as cash while funds concern all the financial resources in their entirety. Inflows and outflows of cash. On the other hand the fund flow statement is using the enlargement Source of accounting.
Cash Flow and Fund Flow are two completely different statements which are required for running a business and analysing its shortcomings. Fund flow changes is mainly analyzed in between the previous year and the current year. Cash flow changes is mainly analyzed in periodic like monthly quarterly or as required by the business.
The basis of the statement in accounting is based on cash. Cash flow refers to all cash which is flowing in and out of the business while fund flows show the source and the use of funds. It is started with funds from operation or funds lost in operation.
The Cash Flow Statement. While funds flow statement reveals the change in the working capital of a company between two balance sheet dates while cash flow statement reveals the change in the cash position of the company between two balance sheet dates. When making a statement for cash flow it contains the opening balance of cash the closing balance of cash and any cash equivalents.