Fuel Source, Inc. is a U.S. subsidiary of a U.K. entity that prepares its financial statements in accordance with (1) IFRS in reporting to its parent and (2) U.S. GAAP for reporting to its U.S. based lender. Fuel Source operates in the oil industry and its operations sometimes result in soil contamination. Fuel Source cleans up this contamination when required to do so under the laws of the particular country in which it operates. During 2018, Fuel Source operates in Dirty Country where there is no legal requirements for Fuel Source to clean up any contamination. However, Fuel Source has a widely published policy in which it undertakes to clean up all contamination that it causes. Fuel Source has a record of honoring this published policy every time it has caused contamination. The U.K. parent also has a widely published environmental policy in which it undertakes to clean up all contamination it causes and also has a strong record of honoring this published policy. During the year ending December 31, 2018 Fuel Sources operations created environmental damage which is estimated to cost $1,000,000 and $1,250,000 to remediate. Fuel Source plans to publish its 2018 financial statements on February 15, 2019.

Accounting Issue: Should Fuel Source recognize the costs to clean the contaminated soil in Dirty Country under U.S. GAAP and IFRS for the year ending December 31, 2018?