The Woodway Company included the following note in its 2000 annual report:

In June 2000, Woodway Company and its principle subsidiaries filed for protection under Chapter 11 of the United States Bankruptcy Code. Woodway recorded a provision for possible impairment of $24 million at December 31, 1999, and recorded an additional provision of $19 million in the second quarter of 2000.

Required

a. Do you think that this $19 million loss should be reported on Woodway’s 2000 income statement? Why or why not?

b. Based on the data in Exercises