Marvelous Procedure Of Fund Flow Statement
A funds flow statement is based on the accrual accounting system and does not provide explanation as to transactions affecting the cash or cash equivalents.
Procedure of fund flow statement. Determination of Funds from Operation. The difference of these two parts is change in working capital. Fund Flow Statement is a statement which indicates various sources from which funds Working Capital have been obtained during a certain period and the uses or applications to which these funds have been put during that period.
This is the second but most important part of Fund Flow Statement. Fund flow statement. The funds-flow-statement is a report on financial operations changes flow or movements during the period.
It explains how working capital raised and used during an accounting period. Statement or Schedule of Changes in Working Capital. Process of Preparing a Fund Flow Statement Funds Flow Statements is prepared in two parts The first one is sources of Funds and the other is Uses of Funds or Application of funds.
This statement is prepared with the help of current assets and current liabilities derived from the two. Sources of funds and applications of funds for a particular period. So it is known as the statement of changes in financial position.
The steps involved in preparing the statement are as follows. It portrays the inflow and outflow of funds ie. Funds flow is a broader concept than cashflow.
How is a Funds Flow Statement Prepared. A fund flow statement is a statement prepared to analyse the reasons for changes in the financial position of a company between two balance sheets. We all know that balance sheet shows our financial position and inflow and outflow of fund affects it.