ABSTRACT
The annual reports examine the frequency of the use of a funds statement in the generally accepted form was 6 per cent in 1945 and 31 per cent in 1954. All research efforts in the United States indicate that the statements of sources and application of funds are much used by the firms themselves even when the statement is not included in the annual report. In Europe the accounting for capital flows has developed independently and in several different forms but has not nearly achieved the same significance as in the United States. European theory and practice indicated only a rare and individual awareness of the American 'funds statement'. A funds statement is often included in the American auditor's report. The funds statement also plays an important role in the credit transactions by American banks. In the most common type of the American funds statement, the changes in net profit are reported by a separation of the financial statements.
