| Cash flow statement | Fund flow statement | |
| 1. | It shows net change in the position of cash and cash equivalents. | It shows change in the position of working capital. |
| 2. | Cash flow statement is based on narrower concept of funds i.e. cash and cash equivalent. | Fund flow statement is based on broader concept of funds i.e. working capital. |
| 3. | It is now mandatory for all the listed companies and is more widely used in India or abroad. | It is not mandatory and it is not being used by the companies. |
| 4. | Cash flow statement classifies and highlights the cash flows into 3 categories ‘operating activities’, ‘investing activities’, and ‘financing activities’. | Whereas such a meaningful classification is not used in fund flow statement. |
| 5. | In cash flow statement of changes in working capital is not prepared as the changes in working capital are adjusted for ascertaining cash generated from operations. | In fund flow statement of changes in working capital is prepared. |
| 6. | In cash flow statement decrease in current liability or increase in current asset results in decrease in cash and vice-versa. | In fund flow statement decrease in current liability or increase in current asset brings increase in working capital and vice-versa. |
Difference between fund flow and cash flow statement
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