swaitsandClaude Opus 5.5
10d9d7d534
Direct method with the operating reconciliation and noncash schedules; it foots by construction (Lean and Kani). Every non-cash account belongs to one section; reversals net; a member or lender paying for the company is cash borrowed and spent (D-42, constructive receipt and disbursement); property a member contributes stays noncash. The bookspec seed: one loader checks every example. Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com> Claude-Session: https://claude.ai/code/session_01T3gXMVt7XJPi6ens1or9Dj
95 lines
3.1 KiB
TOML
95 lines
3.1 KiB
TOML
id = "cash-flow.debt-to-equity"
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title = "An expense a member paid personally, then the member's advance converted to capital"
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rule = "An expense a member pays for the company on credit to the member MUST be shown as cash borrowed from the member and spent, on its date; converting that debt to equity MUST be disclosed as a noncash financing activity, not reported as a cash flow, though both its accounts are financing."
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# CHOICE: entry 1. ASC 230 doesn't address a payment a third party makes
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# on the entity's behalf; the firm guides present it by substance as a
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# constructive receipt and disbursement (a financing inflow and an
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# operating outflow), and the owner chose that (wanderbooks D-42, revising
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# D-35's noncash presentation). Entry 2's disclosure is 50-4's own example.
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status = "CHOICE"
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sources = [
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"ASC 230-10-45-14(b)",
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"ASC 230-10-45-17(b)",
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"ASC 230-10-50-3",
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"ASC 230-10-50-4",
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"PwC Viewpoint, Financial statement presentation 6.9.3.1 (ASC 230 does not address cash a third party receives or pays on the entity's behalf; include it as though through the entity's accounts)",
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"Deloitte Roadmap, Statement of cash flows 7.2 (constructive receipt and disbursement)",
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"BDO Blueprint, Statement of cash flows under ASC 230 (December 2025) 3.4",
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"wanderbooks D-42 (owner, 2026-10-20: a member or lender paying for the company is cash borrowed and spent)",
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]
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tags = ["accrual", "book", "us", "cash-flow", "noncash", "constructive", "partnership"]
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[setup]
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currency = "USD"
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fiscal_year_start = "01-01"
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basis = "accrual"
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rounding = "half-even"
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cash_accounts = ["1000"]
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financing_accounts = ["2100"]
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[[setup.accounts]]
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code = "1000"
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name = "Cash"
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type = "asset"
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[[setup.accounts]]
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code = "2100"
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name = "Due to members"
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type = "liability"
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[[setup.accounts]]
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code = "3000"
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name = "Capital — Member A"
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type = "equity"
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[[setup.accounts]]
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code = "6000"
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name = "Supplies"
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type = "expense"
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[[setup.members]]
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name = "Member A"
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capital_account = "3000"
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[[events]]
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date = "2026-02-03"
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description = "Supplies, paid by Member A personally"
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lines = [
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{ account = "6000", side = "debit", amount = "500.00" },
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{ account = "2100", side = "credit", amount = "500.00" },
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]
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[[events]]
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date = "2026-02-10"
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description = "Member A's advance converted to capital"
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lines = [
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{ account = "2100", side = "debit", amount = "500.00" },
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{ account = "3000", side = "credit", amount = "500.00" },
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]
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# By hand: no company cash moved. Entry 1 is borrowed from the member
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# (financing +500.00, 45-14(b)) and spent (operating -500.00, class (d),
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# 45-17(b)) on 2026-02-03, all of it on the company's behalf; net income
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# -500.00 needs no reconciling item. Entry 2 converts debt to equity, 50-4's
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# first example: disclosed 500.00, though both its accounts are financing.
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[[expect]]
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query = "cash_flow"
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from = "2026-02-01"
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to = "2026-02-28"
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[expect.values]
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operating = "-500.00"
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investing = "0.00"
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financing = "500.00"
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net_change = "0.00"
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difference = "0.00"
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net_income = "-500.00"
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"operating.1" = "-500.00"
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"operating.1.on_behalf" = "-500.00"
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"operating.count" = "1"
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"financing.1" = "500.00"
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"financing.1.on_behalf" = "500.00"
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"financing.count" = "1"
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"noncash.2" = "500.00"
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"noncash.count" = "1"
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