An employee of a CCPC was lent money by the corporation to acquire common shares of the corporation. In finding that accrued but unpaid simple interest on the loan that was capitalized was currently deductible (but not compound interest, which would not be deductible until paid) on the assumption that there was a reasonable expectation of receiving dividends on the shares, the Directorate stated:
Following ... Plawiuk ... the Agency's position is to allow an individual to deduct, pursuant to the provisions of paragraph 20(1)(c), interest accrued and payable, to the extent that the individual regularly uses the accrual method to deduct expenses in computing income from property in respect of shares and that this is the method required under generally accepted accounting principles.