1, the companys wells recently exploded, pouring a significant amount of oil into a nearby waterway. It took one month to cap the well, and during that time the company incurred significant costs in capping the well, including costs related to many failed attempts. Northstar Resources has announced that it will clean up the spilled oil and estimates that it will cost between $10 million and $15 million to do so. It has also announced that it will act in a responsible manner dealing with any losses and complaints that local landowners and farmers may have in connection with the spill.

Discuss the financial reporting issues (recognize or do not recognize) and provide recommendation(s) on how to handle each situation. As you write, keep your audience in mind.