For the following case of subsequent events, determine whether it should be reflected in the 2020 financial statements (B/S, I/S, CF) or footnote disclosure (with pro forma information) is advisable, and briefly explain why (specify Type I or Type II subsequent event):

Early January 2021, a client was forced to recall its food product that was sold during 2020 for possible E-coli contamination. The products subject to recall had cost the company $4 million and sold for $6 million, which is material. There was no contingent provision for product liabilities.