Depreciation Choice

Jn is the chief accountant in a company that was recently taken over by new owners. Jn has completed the draft financial statements for the year and sees that the company is not achieving the goals that the new owners have set for the profit for the year. Jn is therefore worried that the owners of the company will subsequently lay off employees, incl. him, to bring down costs.

Jn also knows that depreciation is a large cost item in the company and the company has so far used an acceleration method for the depreciation of machinery and equipment. For example, one of the company's production lines is valued at ISK 396 million. kr. but its book value is ISK 352 million. kr. Jn wonders whether he should not change the depreciation of the year so that he increases the residual value of fixed assets and prolongs the useful life so that the depreciation of the year will be significantly lower. In this way, it would be possible to prevent the company's employees and himself from losing his job.

Answer the following in approx. 100 to 400 words;

Who are the stakeholders in this case? What are the ethical issues? What should Chief Accountant Jn do?