What is difference between cash flow statement and fund flow statement?

The major differences between cash flow statement and fund flow statement are as follows −

Cash flow statement

• Inflows and outflows of cash and cash equivalents.

• Main purpose is to show the movement of cash.

• Cash basis of accounting.

• Short term analysis.

• Inflows and outflows of cash.

• Contains both opening and closing balances of cash and its equivalents.

• Part of financial statement.

• Calculates net cash position.

• Mandatory to report as per GAAP guidelines.

• External use.

• Cash flow from operating, financing and investing.

Fund flow statement

• Shows change in financial position of the entity.

• Main purpose is to show the reason in change in financial position between two accounting periods.

• Accrual basis of accounting.

• Long term analysis.

• Sources and applications of funds.

• Does not contain opening and closing balance of cash and its equivalents.

• Part of financial statement.

• Calculates working capital.

• Internal use.

• Not mandatory to report.

• Applications of funds and sources of fund.