During the audit of MBL Limited, a large manufacturing company, you come across a large piece of specialized equipment that is completely destroyed by fire. Upon further inquiry and investigation, you find out that the fire occurred one week before the year end of the business. Police and the fire marshal are in the process of determining if arson is involved. Due to the delay, no entry has been made concerning this event, although there is insurance coverage for the damage. The controller states that under the circumstances the loss is yet to be determined and, in any case, the amount is not material. What, if anything, should be recorded if 

(a) The carrying amount of the equipment is within 10% of the expected proceeds from the insurance company or 

(b) The carrying amount is near scrap value and the insurance coverage provides for the replacement of the equipment? Use the four-step approach to decide how to assess whether this omission is material.