Files
bookspec/examples/cash-flow.debt-to-equity.toml
T
swaitsandClaude Opus 5.5 10d9d7d534 P3: the cash flow statement by ASC 230 (defect 1, D-35, D-42)
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
2026-10-21 09:35:32 -06:00

95 lines
3.1 KiB
TOML

id = "cash-flow.debt-to-equity"
title = "An expense a member paid personally, then the member's advance converted to capital"
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."
# CHOICE: entry 1. ASC 230 doesn't address a payment a third party makes
# on the entity's behalf; the firm guides present it by substance as a
# constructive receipt and disbursement (a financing inflow and an
# operating outflow), and the owner chose that (wanderbooks D-42, revising
# D-35's noncash presentation). Entry 2's disclosure is 50-4's own example.
status = "CHOICE"
sources = [
"ASC 230-10-45-14(b)",
"ASC 230-10-45-17(b)",
"ASC 230-10-50-3",
"ASC 230-10-50-4",
"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)",
"Deloitte Roadmap, Statement of cash flows 7.2 (constructive receipt and disbursement)",
"BDO Blueprint, Statement of cash flows under ASC 230 (December 2025) 3.4",
"wanderbooks D-42 (owner, 2026-10-20: a member or lender paying for the company is cash borrowed and spent)",
]
tags = ["accrual", "book", "us", "cash-flow", "noncash", "constructive", "partnership"]
[setup]
currency = "USD"
fiscal_year_start = "01-01"
basis = "accrual"
rounding = "half-even"
cash_accounts = ["1000"]
financing_accounts = ["2100"]
[[setup.accounts]]
code = "1000"
name = "Cash"
type = "asset"
[[setup.accounts]]
code = "2100"
name = "Due to members"
type = "liability"
[[setup.accounts]]
code = "3000"
name = "Capital — Member A"
type = "equity"
[[setup.accounts]]
code = "6000"
name = "Supplies"
type = "expense"
[[setup.members]]
name = "Member A"
capital_account = "3000"
[[events]]
date = "2026-02-03"
description = "Supplies, paid by Member A personally"
lines = [
{ account = "6000", side = "debit", amount = "500.00" },
{ account = "2100", side = "credit", amount = "500.00" },
]
[[events]]
date = "2026-02-10"
description = "Member A's advance converted to capital"
lines = [
{ account = "2100", side = "debit", amount = "500.00" },
{ account = "3000", side = "credit", amount = "500.00" },
]
# By hand: no company cash moved. Entry 1 is borrowed from the member
# (financing +500.00, 45-14(b)) and spent (operating -500.00, class (d),
# 45-17(b)) on 2026-02-03, all of it on the company's behalf; net income
# -500.00 needs no reconciling item. Entry 2 converts debt to equity, 50-4's
# first example: disclosed 500.00, though both its accounts are financing.
[[expect]]
query = "cash_flow"
from = "2026-02-01"
to = "2026-02-28"
[expect.values]
operating = "-500.00"
investing = "0.00"
financing = "500.00"
net_change = "0.00"
difference = "0.00"
net_income = "-500.00"
"operating.1" = "-500.00"
"operating.1.on_behalf" = "-500.00"
"operating.count" = "1"
"financing.1" = "500.00"
"financing.1.on_behalf" = "500.00"
"financing.count" = "1"
"noncash.2" = "500.00"
"noncash.count" = "1"