"ACCOUNTANCY1ACCOUNTANCYACCOUNTANCY2Table of contents:ContentsAnswer 1: ................................................................................................................................... 3Answer 2: ................................................................................................................................... 9Update on statement of cash flows:...................................... Error! Bookmark not defined.Major changes: ..................................................................................................................... 10Deloitte views:...................................................................................................................... 13EY views: ............................................................................................................................. 14BKD views: .......................................................................................................................... 14References: ............................................................................... Error! Bookmark not defined.Appendix: ................................................................................. Error! Bookmark not defined.ACCOUNTANCY3Answer 1:Materiality is the concept that is defined as something that is of value to the company and theinformation of which would be helpful for the company. And hence, all the items have to bereported in the financial statements so that the investors could make their judgement withregard to the same and since materiality means differently to different people, one of thecases of being material has been listed below:There were some of the companies that were having problems with the issue of materiality inthe financial statements and so, the following clarification with regard to the materiality wasissued for them.ASIC expects companies to adopt realistic valuations for asset values, appropriate accountingpolicies and better communication of that information in the lead-up to the end of financialyear reporting season.Announcing its focus areas for 30 June 2016 financial reports of listed entities and otherentities of public interest with many stakeholders, ASIC highlighted key problem areas toaddress.‘Directors and auditors should continue to focus on values of assets and accounting policychoices. We continue to see companies use unrealistic assumptions in testing the value ofassets or that have applied inappropriate approaches in areas such as revenue recognition,’ASIC Commissioner John Price said.During the month of August of the year 2016, the Federal Accounting standards AdvisoryBoard FASB had issued an accounting standard for lease to be followed for the federalgovernment entities. "