The only thing I would add, is that in the moment that it has happened, I think the parents should try to downplay the damage.

``oh, we will have to start with the ice creme... and we will get a brand new cake so we can have both''

How traumatic the event is, is tied to how the adults react to it. The act should be frame to minimize, not maximize its emotional impact.

All that said, of course the other parent should pay... and of course the child should be made to apologize too.