In this paper we have studied the streamfunction-vorticity formulation can be advantageously used to analyse steady as well as unsteady incompressible flow and heat transfer problems, since it allows the elimination of pressure from the governing equations and automatically satisfies the continuity constraint. On the other hand, the specification of boundary conditions for the streamfunction-vorticity is not easy and a poor evaluation of these conditions may lead to serious difficulties in obtaining a converged solution. The main issue addressed in this paper is the specification in the boundary conditions in the context of finite element of discretization, but approach utilized can be easily extended to finite volume computations.