If I were the accountant of this company, I have to tell the CEO that
this is a violation and unethical. As a CEO, he should know some
basic knowledge of business or financial principles. As accountants,
we have a professional responsibility to report any financial
information accurately and transparently by following the GAAP. I
am not able to capitalize on the interest for 2015 of this construction
because it was started around June 2016. According to the book,
“there is nothing to capitalize until expenses are actually incurred”
(Wahlen et al., 2017). Even though the planning of construction was
started in 2015, there is no interest in this construction to capitalize
in 2015.
Adding lots of overhead and adding my partial salary to the cost of
the building is unethical and illegal unless there are some costs that
were not recorded or reported before.
References:
Wahlen, Jones & Pagach. (2017). Intermediate Accounting: Reporting
and analysis (2nd ed.). Boston, MA: Cengage Learning.
