Difference Between Fund Flow Statement, Balance Sheet, and Income Statement

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on September 16, 2021

Difference Between Fund Flow Statement and Balance Sheet

The main differences between fund flow statements and balance sheets are summarized below.

Type of Difference Fund Flow Statement Balance Sheet
Nature Fund flow statements show changes in the financial position of an organization. Thus, they are dynamic in nature. Balance sheets provide financial information on a specific date and, therefore, their nature is static.
Objective To show various sources and the uses of those sources over a specific period. To show changes in assets and liabilities for a specific period.
Interest Fund flow statements are useful for managerial decision-making. Balance sheets are used to study an organization’s financial position, not to assist decision-making.
Format Fund flow statements have no specific format. Balance sheets are always prepared according to a specific format.
Dependent on Change in Working Capital Fund flow statements cannot be prepared without a schedule of change in working capital. Balance sheets do not require a schedule of change in working capital. They are dependent on the profit and loss account.

Difference Between Fund Flow Statement and Income Statement

The following are the major points of difference between fund flow statements and income statements.

Type of difference Fund Flow Statement Income Statement
Objective To highlight changes in financial position. To show profit and loss.
Means of Sources Fund flow statements show where funds are received and how they are spent. Shows various expenses and types of income. When expenses exceed income, there is a net loss.
Dependencies Dependent on an income statement. Cannot be prepared using data from the fund flow statement.
Format Fund flow statements have no specific format. They can have either a horizontal or vertical format. Income statements are prepared according to a specified format. Trading and profit and loss accounts are maintained based on the rules of the double entry system of bookkeeping.
Benefits Always used for the benefit of top management. Useful to shareholders, owners, and bankers.

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We hope the information above satisfies your questions about the differences between fund flow statement, balance sheet, and income statement. Know more about the practical uses of these statements by reaching out to a financial advisor in Irvine, CA. To get a full list of the areas we cover, please visit our financial advisor page.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.

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