B C D E PLANNING MATERIALITY CALCULATION Only if the current year net income $($loss$)($or other measure $)$ is significantly different from the entity's historical results would $2-$year averaging to obtain normalized net income $($loss$)($or other measure$)$ be appropriate. PROFIT ORIENTED ENTITIES Current Year Prior Year Net income $($loss$)$ Plus $($minus$)$ unusual, non$-$recurring revenues and expenses, and extraordinary items. $--$ ADJUSTED NET INCOME $($LOSS$)--$ Adjusted net income $($loss$)$ multiplied by: $5\%00$ Current Year TOTAL ASSETS Total assets multiplied by: $1\%00$ Current Year TOTAL REVENUES Plus $($minus$)$ unusual, non$-$recurring revenues $-$ ADJUSTED REVENUES $--$ Total adjusted revenues multiplied by: $1\%00$