Last week there was significant water damage to some finished desks at a company owned warehouse. Unfortunately, due to the level of insurance deductibles, the companys insurance policy will only pick up a portion of the 6 cent after tax loss. Losses similar to this one have happened on three separate occasions over the last 6 years.

1. What would US GAAP require you to report or disclose in your quarterly 10Q?

2. How would the event be reflected in the quarterly income statement?