Subcommittee on IASC Exposure Draft Number 7 of The American Accounting Association's Committee on Financial Accounting Standards.

Abstract This article presents the text of a report by a subcommittee of the Committee on Financial Accounting Standards of the American Accounting Association which commented on a standard on fund statements in the U.S. as of October 2, 1977. The empirical literature on the funds statement falls into three broad categories. The first category focuses on the impact of inclusion of the funds statement in the financial report, i.e., whether or not it is important to financial statement users. The second category concerns whether the funds statement should present only data that pertain to the liquidity position of company, or alternatively whether the funds statement should reflect all resources. The third category of empirical research on the funds statement examines the degree of compliance with APB Opinion 19. The more recent findings concerning the importance of the funds statement suggest that users' experience with the funds statement has had a marked effect on their perception of the usefulness of the statement.