Stony Electronics, an electronics manufacturer, includes battery packs with its laptop computers that it sells. After a year of sales of the product, management learns that the battery packs have the potential to overheat, which may lead to burns or fire hazards. As a result of this issue, management has determined that the likelihood of recalling the battery packs is highly probable. The estimated cost of the recall (publishing the notice and replacing the batteries with other safer options) is \(\$ 350,000\).

Required 

How should this potential product recall be treated in the Stony Electronics financial statements?