I would write the following email to the CEO to have our
correspondence in writing:
"Dear CEO,
After reviewing the case I have determined we cannot capitalize
interest since 2015 because the capitalization period begins when
expenditures for the asset have begun, which was in 2016 (Whalen,
2017). We also cannot take it out of this year's expense because the
capitalization period ends when the asset is substantially complete
and ready for its intended use (Whalen, 2017). In addition, we cannot
increase profits by adding lots of overhead to the cost of the building
this year, to allocate any amount other than the incremental
overhead would result in less overhead being allocated to inventory,
resulting in lower expenses and higher income; income should reflect
the success of selling goods and services and not depend on the
amount of construction undertaken (Whalen, 2017). To falsify
information on financial statements or inflate numbers to increase
profits would be unethical, illegal, and immoral. I'm sorry but I am
unable to implicate any suggestions you have made at this time.
Please let me know if you have any questions, thank you."
Whalen, J. M., Jones, J. P., & Pagach, D. P. (2017). Intermediate
Accounting: Reporting and Analysis. Boston, MA: Cengage Learning.
