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October 13, 2008

What is the difference between the Cash Flow and Funds Flow statements?

The cash flow statement, known formally as the Statement of Cash Flows, reports a company’s change in cash and cash equivalents from one balance sheet date to another. The cash flow statement classifies the amount of the change according to operating, investing, and financing activities. The cash flow statement has been required by the Financial Accounting Standards Board since 1988, when it issued its Statement No. 95. You can read about the statement of cash flows at www.FASB.org/st.

Prior to 1988, accountants prepared a funds flow statement. Generally, the funds flow statement reported on the change in working capital from one balance sheet date to another.

Read AccountingCoach.com’s explanation of the cash flow statement.

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About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.



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Comments

16 Responses to “What is the difference between the Cash Flow and Funds Flow statements?”

  1. cryz boy on November 28th, 2008 7:26 am

    Thanks very mutch for the good work doing. we are really benefiting from it. Please i will like to know why one should use the accrual system of accounting in his or her business. please try and mail this answer to me through this email boy.cryz@yahoo.com in order for me to help brother in his spare parts dealing business. Hope to hear from you soon.

  2. Munish on January 28th, 2009 12:18 am

    thanks, it helps me much in my MBA study.
    also tell me what is the difference between “fund flow statement & balance sheet” through mail.

    thanks

  3. Nidhi on March 31st, 2009 2:10 pm

    Could you please explain me about fund flow statement

  4. Jamshaid on April 11th, 2009 6:09 am

    What is a Funds Flow Statement? ASP Please

    Jamshaid

  5. mannu on May 26th, 2009 2:09 am

    hello sir please tell me the diff. between cash flow and fund flow

  6. ACoach on May 27th, 2009 6:04 am

    Cash flow pertains to show how the amount of cash has changed. Fund flow explains how the amount of working capital has changed. The financial statement, Statement of Cash Flows, has replaced the Statement of Funds Flow.

  7. Indranil on June 2nd, 2009 12:45 pm

    Thanks

  8. sunil kumar mahato on June 2nd, 2009 8:22 pm

    it helps to me understading the cash and funds flow but i confusion in the company or organization both are neccessary to preapre or not please help me send my email .

  9. Nazir on June 3rd, 2009 11:48 pm

    Thank you very much for the services yuo provide. I benefit a lot from this website. I am a qualified Management Accountant from Pakistan Institute of Cost & Management Accountants and am regular reader of various topics on thia website. Thank you very much once again.

    Aazir Ahmad
    ACMA
    Pakistan

  10. Rev. J. Bavani Rajan on July 8th, 2009 8:08 am

    Sir,
    I am an Accountant turned Pastor. After nearly 10 years of gap I am taking a look at these basic accounting concepts and principles. Your coaching is really simple, to the point and understandable. I am being asked to give training to some small church treasurers in accounting. can you please help me with some tips for NGO accounting?
    Thanks a lot

  11. ACoach on July 8th, 2009 8:43 am

    You can read and/or print a book I had written entitled Keeping Your Parish Financially Healthy by going to the About Us tab on AccountingCoach.com. The site and the book are free.

  12. nabiil on January 16th, 2010 5:16 am

    what is another names of
    1.cash flo statement
    2.income statement
    3.balancesheet statement
    4.stockhoder’s equity
    pls anwser me these question and also the rfrenc im high scool student asoon as possible thank you all

  13. Amin on January 19th, 2010 5:11 am

    Could you please explain why we add back depreciation or amortization to calculate debt service coverage ratio?

  14. suresh punna on February 16th, 2010 12:52 pm

    What is the diff b/t cash flow statement & cash book.

  15. baz on February 20th, 2010 6:36 am

    sir
    first of all i want to tank this sit giving good informtions about accounts in simple and easy way
    sir can u give an example for journel entries

  16. shameee on March 12th, 2010 10:02 am

    what is the difference between cash flow statement &fund flow statement

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