On March 15, year 2, a calendar-year company issued its year 1 financial statements. On March 1, year 2, a fire destroyed the company's only manufacturing plant. Which of the following statements is correct regarding the treatment of the loss in the December 31, year 1, financial statements? The loss should not be recognized or disclosed in the year 1 financial statements. The loss should be recognized in the year 1 financial statements. The loss should be disclosed and not recognized in the year 1 financial statements. Any probable insurance recoveries should be recognized in the year 1 financial statements