Key Difference – Direct vs Indirect Cash Flow Direct and indirect cash flow are two methods of arriving at the net cash flow from operating activities in the cash flow statement. Cash flow statement consist of three main sections: net cash flow from operating activities, net cash flow from investing activities and net cash […]
Difference Between Cash Flow and Fund Flow Statement
Key Difference – Cash Flow vs Fund Flow Statement The cash/fund availability is a vital aspect for the routine survival of the business. Cash flow statement and fund flow statement are two key statements prepared by companies. However, these two statements are often confused since the purpose of both is to demonstrate the cash/fund […]
Difference Between Average Cost and Marginal Cost
Key Difference – Average Cost vs Marginal Cost The key difference between average cost and marginal cost is that average cost is the total cost divided by the number of goods produced whereas marginal cost is the rise in cost as a result of a marginal (small) change in the production of goods or […]
Difference Between Translation and Remeasurement
Key Difference – Translation vs Remeasurement Translation and remesurement are two common aspects associated with using foreign currency. Both are based on the principles of exchange rates (the rate at which a currency will be converted to another). However, here is a subtle difference between the two conversion methods. The key difference between translation […]
Difference Between Functional Currency and Reporting Currency
Key Difference – Functional Currency vs Reporting Currency Some companies conduct transactions in one currency and record the financial results in a different currency; thus, giving rise to two types of currencies, functional and reporting currency. IAS 21- ‘The Effects of Changes in Foreign Exchange Rates’ provides definitions to the terminologies of these two […]
Difference Between Analysis and Interpretation of Financial Statements
Key Difference – Analysis vs Interpretation of Financial Statements Financial statements include the income statement, balance sheet, statement of cash flows, and a statement of changes in equity. The information in these statements is analysed and interpreted in order to facilitate decision making. The key difference between analysis and interpretation of financial statements is […]
Difference Between Comparative and Common Size Statement
Key Difference – Comparative vs Common Size Statement Financial statements are of wide use to a number of stakeholders, especially for shareholders as such statements provide a number of important information. Comparative and common size financial statements are two forms of statements used by companies to extract financial information. The key difference between comparative […]
Difference Between Passive and Non-passive Income
Key Difference – Passive vs Non-passive Income The key difference between passive and non-passive income is that passive income refers to the income resulting from rental activity or any other business activity in which the investor does not materially participate whereas non-passive income consists of any type of active income, such as wages, business income or […]
Difference Between Trend Analysis and Comparative Analysis
Key Difference – Trend Analysis vs Comparative Analysis Trend and comparative analysis are two main types of analysis methods used to study the performance of the current financial year and plan the upcoming financial year’s budget using financial statements. The key difference between trend analysis and comparative analysis is that trend analysis is a […]
Difference Between Horizontal and Vertical Analysis
Key Difference – Horizontal vs Vertical Analysis Financial statements such as the income statement, balance sheet, and cash flow statement are important statements that should be studied extensively in order to arrive at conclusions regarding the performance of the current financial year as well as to assist planning the upcoming financial year’s budget. Horizontal […]
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