#  What are the components of a good flux explanation? 

 



The elements of a good flux explanation are:

- What changed
- Why it changed
- Quantify the elements of the change
- Written such that a 3rd party with accounting knowledge can understand the explanation

Fluxes are important because:

- They help identify and account for significant and/or unusual changes from the prior period
- They help ensure accounting and reporting data is complete and accurate
- They assist management in monitoring and analyzing financial information, including providing insight into future budgets
- They help detect errors and allow for corrective action to be taken, if necessary
- They are required by our auditors



 

 

 



 

 See also:- [ Financial Accounting & Reporting ](/faq/financial-reporting)