The following individuals are making some statements related to various accounting aspects, and you are presented with four of these statements as follows: 1. Director: 'We make a provision for environmental liabilities when we know that we have a legal liability to undertake remedial work and it is probable that the expenditure will be incurred'. 2. Analyst: 'I have great problems in tracking the depreciation policy of this company. It owns a fleet of aircrafts. Over the past three years the expected useful life of aircrafts has risen from 20 years to 25 years and now it is 30 years. I find it hard to believe that aircraft manufacturing and maintenance technology has improved so much in just three years.' 3. Investor: 'In this company's accounting policy statements, it says that interest payable on funds borrowed to finance capital projects is added to the cost of the project as an asset in the statement of financial position (balance sheet). I thought that interest payable was an expense to be recognised in the income statement. 4. Shareholder: 'I don't understand why the annual report of the company includes both the income statement and the statement of cash flows. Is there any difference between profit and cash flow?' Briefly discuss the accounting quality characteristics and accounting conventions that are relevant to each of the four statements