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The functional requirements document (FRD) is a formal statement of an applicationâs functional requirements. It serves the same purpose as a contract. The developers agree to provide the capabilities specified. The client agrees to find the product satisfactory if it provides the capabilities specified in the FRD.
A functional specification is the more technical response to a matching requirements document, e.g. the Product Requirement Document PRD. Thus it picks up the results of the requirements analysis stage. On more complex systems multiple levels of functional specifications will typically nest to each other, e.g. on the system level, on the module level and on the level of technical details.