Statement of Source and Application of Funds



Chapter 12 is concerned with the preparation and interpretation of the ‘Statement of Source and Application of Funds’ (Funds Flow Statement). Since SSAP 10 was issued in 1975 UK companies have been required to publish this statement as part of their annual report. The statement is intended to demonstrate, for an accounting period, how a business’s activities were financed, and how these resources were used. The information necessary for the preparation of the statement can usually be derived from the information in the profit and loss account and balance sheet. However, as we shall see, the Source and Application of Funds Statement presents the information in a way which adds to the understanding of the data in the other two financial statements.


Cash Flow Balance Sheet Accounting Information Fund Statement Working Capital 
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Notes and References

  1. 1.
    ED 54 ‘Cash flow statements’ issued by the Accounting Standards Committee in July 1990 proposed the adoption of cash flows as the basis for a new standard which would be developed to replace SSAP 10.Google Scholar
  2. 2.
    See, for example, the Marks and Spencer Source and Application of Funds in Appendix B.Google Scholar
  3. 3.
    It cannot, of course, be assumed that all past trends can be extrapolated into the future; they must be interpreted in the context of other available information.Google Scholar

Copyright information

© Arthur Hindmarch and Mary Simpson 1991

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