Imagine you are the accountant for Jager Company, a privately held company that is constructing a building for its own use. You are working on closing the books for 2022 when the CEO of the division stops by your office with some interesting requests. The CEO wants you to check if the company has capitalized interest expenses related to the building construction since the beginning of last year, and if not, to take it out of this year's expenses. Additionally, the CEO suggests adding overhead costs to the building's cost, such as a portion of your salary, to increase profit for the year.

As you research the generally accepted accounting principles on capitalization and consider the ethical aspects of the CEO's requests, you start questioning other aspects of the company's financial reporting.

In another scenario, the president of Jager Company, Peter, finalized a deal to exchange shares in the company for a piece of land and a building. Peter seeks your advice on how to account for this transaction and whether it qualifies as an exception to the general rule of using fair value.

For this activity, address the following points:

1. Based on your research, explain whether the company can capitalize interest expenses related to the building construction dating back to 2021, as suggested by the CEO. Discuss the financial reporting and ethical implications of this decision.
2. Analyze the swap of the land and building for shares in the company. Determine if this transaction qualifies as an exception to the general rule of using fair value. Discuss any ethical considerations that arise from this transaction.
3. Reflecting on the CEO's requests and the swap transaction, discuss any potential ethical issues that could arise in Jager Company's financial reporting practices. Consider the ethical responsibilities of accountants and the impact of such practices on stakeholders.