docs(spec): every rule traced to an authority; public-domain sources vendored

Stephen asked that specs come from recognized documents, not from
anyone's memory. There is no single US bookkeeping bible; authority is
layered, and this records it:

- docs/spec/sources/: verbatim excerpts (whitespace normalized), each
  with URL, retrieval date, and the SHA-256 of the fetched file, of
  public-domain texts: Pacioli's 1494 treatise in Geijsbeek's 1914
  translation (double entry, the trial balance, one money, write only
  forward, correct by opposite entry, close into capital); IRS Pub. 583,
  538, 946, 15; the 1099-MISC/NEC instructions (2025 and 2026); 26 U.S.C.
  §6041, §6041A, §704; Treas. Reg. §1.263(a)-1(f) and -4(f); Notice
  2015-82; Rev. Proc. 98-25; Form 1065 instructions; 17 U.S.C. §105. The
  excerpts were extracted by matching each passage against the fetched
  file, so none can contain text the source doesn't.
- docs/spec/rules.md: the rule catalog, B-1 to B-22. Each rule says
  AUTHORITY, CONVENTION, or DECISION; cites its sources (FASB's
  Codification and Concepts Statement 8 and OpenStax quoted briefly,
  never copied: copyright and CC BY-NC-SA); and names the code that
  enforces it and the tests and proofs that check it.
- Spec blocks in the code now carry SOURCE: lines into the catalog;
  AGENTS.md makes sourcing rule 0 of the formal-methods bar.

Corrections the sources turned up: the de minimis limit is $500 in the
regulation and $2,500 by Notice 2015-82 (both now cited); 1099
thresholds after 2026 are inflation-indexed, so the engine's flat
$2,000 for 2027+ is an open question (B-19). Unverified ASC paragraphs
(360-10-35-4, 340-10, 230-10-45-10, 606-10-55-37B, 210) are listed in
docs/spec/README.md until someone with a FASB basic-view login reads
them.

Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
Claude-Session: https://claude.ai/code/session_01GWVo7x3UHw5kwCUaWxiejX

docs/spec/rules.md

@@ -0,0 +1,329 @@
+# Rule catalog
+
+Every rule the engine enforces, the authority for it, and what checks it.
+Status is **AUTHORITY** (a source states the rule), **CONVENTION** (common
+practice no authority states; the best reference is given), or
+**DECISION** (a human chose, and when). Vendored sources are in
+`sources/`; FASB and OpenStax are quoted briefly under their copyright and
+license (see `README.md`). Quotes from FASB's Codification were read in
+Deloitte's DART roadmaps, which reproduce it ("FASB Accounting Standards
+Codification: Copyright © 2005 - 2026 by Financial Accounting
+Foundation").
+
+Spec blocks in the code cite these as `SOURCE: rules.md B-n`.
+
+---
+
+## B-1 Every entry is a double entry: debits equal credits
+
+**Status:** AUTHORITY
+
+- Pacioli ch. 36 (`sources/pacioli-1494.md`): "All entries made in the
+  ledger have to be double entries — that is, if you make one creditor,
+  you must make some one debtor."
+- IRS Pub. 583 (`sources/irs-records.md`): "It is self-balancing because you
+  record every transaction as a debit entry in one account and as a credit
+  entry in another. Under this system, the total debits must equal the
+  total credits after you post the journal entries to the ledger accounts."
+
+**Enforced:** `kernel::check_lines` via `JournalEntry::validate` (two or
+more lines, debits = credits exactly). **Checked:** Kani
+`check_lines_is_exact`, `accepted_entry_nets_to_zero`; Lean
+`Accepted.net_zero`; property `prop_posted_entries_balance`.
+
+## B-2 A line's amount is positive; its side gives the direction
+
+**Status:** CONVENTION
+
+Pacioli keeps amounts in a debit column and a credit column (ch. 36: "All
+the creditors must appear in the Ledger at the right hand side, and all the
+debtors at the left"); the side, not a sign, says which way money moves. No
+authority forbids a negative amount outright; wanderbooks refuses them so
+that every line reads one way (2026-10-13, found by the formal pass).
+
+**Enforced:** `kernel::check_lines` (`NegativeAmountLine`, `ZeroAmountLine`).
+**Checked:** Kani `check_lines_is_exact`; test
+`negative_amount_line_is_rejected`.
+
+## B-3 One money through the ledger; foreign amounts at the transaction-date rate
+
+**Status:** AUTHORITY
+
+- Pacioli ch. 36: "the money that you reckon by at the beginning should be
+  the same all through the Ledger."
+- ASC 830-20-30-1 (cited): "each asset, liability, revenue, expense, gain,
+  or loss arising from the transaction shall be measured initially in the
+  functional currency of the recording entity by use of the exchange rate
+  in effect at that date."
+
+**Enforced:** `Ledger::add_line` (base currency only),
+`Ledger::add_line_fx` (base amount = foreign amount × rate, original kept).
+**Checked:** `foreign_currency_line_is_rejected`, `fx_overflow_is_an_error`.
+
+## B-4 Five elements, closed list
+
+**Status:** AUTHORITY (definitions); the five-type chart is CONVENTION
+
+FASB Concepts Statement No. 8, Ch. 4 (2021), which replaced Concepts
+Statement 6 (cited): E16 "An asset is a present right of an entity to an
+economic benefit." E37 "A liability is a present obligation of an entity to
+transfer an economic benefit." E61 equity is "the residual interest in the
+assets of an entity that remains after deducting its liabilities." E80
+revenues "are inflows or other enhancements of assets … or settlements of
+its liabilities … from delivering or producing goods, rendering services,
+or carrying out other activities." E81 expenses "are outflows or other
+using up of assets … or incurrences of its liabilities …".
+
+**Enforced:** `AccountType` (five variants). **Checked:** by type.
+
+## B-5 Normal balances
+
+**Status:** CONVENTION
+
+No standard defines normal balances. OpenStax, *Principles of Accounting,
+Vol. 1* §3.1 (cited; "Access for free at openstax.org"): "As assets and
+expenses increase on the debit side, their normal balance is a debit…
+Since liabilities, equity (such as common stock), and revenues increase
+with a credit, their 'normal' balance is a credit." Pacioli ch. 12: capital
+"must always be placed as creditor … and the cash always debtor."
+
+**Enforced:** `AccountType::normal_side`, `kernel::normal_balance`.
+**Checked:** Kani `normal_balance_is_signed`, `normal_side_increases`; Lean
+`balance_after_line`.
+
+## B-6 The trial balance balances
+
+**Status:** AUTHORITY
+
+Pacioli ch. 36: "the total of the credits — I do not say creditors —
+should be equal to the total of the debits — I do not say debtors. If they
+were not equal there would be a mistake in the Ledger." IRS Pub. 583 (B-1).
+
+**Enforced:** follows from B-1. **Checked:** Kani `trial_balance_columns`;
+Lean `trial_balance_iff`, `Reachable.trial_balance`,
+`Reachable.trial_balance_through`; properties.
+
+## B-7 The accounting equation
+
+**Status:** AUTHORITY
+
+CON 8 Ch. 4 ¶E62 (cited): equity "is the difference between the entity's
+assets and its liabilities." On a live book, income not yet closed is part
+of equity (B-11).
+
+**Checked:** Kani `accounting_equation`; Lean `accounting_equation`,
+`Reachable.accounting_equation[_through]`; property
+`prop_balance_sheet_balances`.
+
+## B-8 Posted is forever: the book is written only forward
+
+**Status:** AUTHORITY
+
+- Pacioli ch. 36: "You should not write backward, but always forward —
+  that is, go forward as the days go, which never come back. If you do
+  otherwise, the book would be untrue."
+- German Commercial Code (HGB) §239(3) (cited; official English
+  translation): "An entry or a documented record may not be modified such
+  that it is no longer possible to establish its original content."
+- Rev. Proc. 98-25 (`sources/irs-records.md`): machine-sensible records
+  must keep the audit trail.
+
+**Enforced:** posted entries immutable; the journal is append-only and
+hash-chained. **Checked:** Lean `Step.extends`, `Steps.extends`; property
+`prop_posted_entries_immutable`; store `journal_tamper_is_detected`.
+
+## B-9 A mistake is corrected by an opposite entry, never erased
+
+**Status:** AUTHORITY
+
+Pacioli ch. 31 (the *storno*): "you shall make another entry opposite this
+one in the credit for the same amount … After you have made this
+correction it is just as if you had written nothing in the debit column."
+Ch. 36: "Mark with a cross or with an "H" that special entry, and then make
+an entry on the opposite side under the same account."
+
+**Enforced:** `Ledger::reverse_entry` (same lines, sides flipped, linked by
+`reversal_of`). **Checked:** Kani `reversal_mirrors`, `reversal_cancels`;
+Lean `accepted_reversal_iff`, `movement_with_reversal`.
+
+## B-10 An entry is reversed at most once; a closing entry never
+
+**Status:** DECISION (Stephen, 2026-10-13)
+
+Follows from B-9 (a correction corrects once) and B-11 (a closed period
+stays closed). **Enforced:** `Ledger::check_reversal`. **Checked:**
+`an_entry_is_reversed_at_most_once`, `a_closing_entry_is_never_reversed`.
+
+## B-11 Revenue and expenses close into profit and loss, and that into capital
+
+**Status:** AUTHORITY (mechanics); the account the net lands in depends on
+the entity
+
+- Pacioli ch. 34: "you shall close this account into the capital account";
+  ch. 27: profit and loss "must then be transferred for its closing (saldo)
+  into the capital account."
+- OpenStax §5.1 (cited): "Temporary (nominal) accounts are accounts that
+  are closed at the end of each accounting period." Corporations close into
+  retained earnings; partnerships into each partner's capital (B-13).
+
+**Enforced:** `Ledger::close_period_to`. **Checked:** Kani
+`closing_line_zeroes`, `closing_entry_balances`; Lean
+`closingEntry_zeroes`, `closingEntry_accepted`, `close_zeroes`,
+`close_credits_net_income`; `a_close_sweeps_only_through_the_period_end`.
+
+## B-12 A closed period takes no new postings; periods close in order
+
+**Status:** CONVENTION
+
+Periods themselves: IRS Pub. 538 (`sources/irs-periods-and-methods.md`)
+defines the tax year, calendar and fiscal. Locking a closed period and
+closing in order are practice (and follow from B-8: a closed period's
+book is not rewritten). **Enforced:** `closed_period_containing`,
+`CloseOutOfOrder`, `Store::rehearse`. **Checked:** Lean `Steps.frozen`;
+store property `refused_commands_never_reach_the_journal` (no draft in a
+closed period).
+
+## B-13 Partners share income by the partnership agreement; capital accounts carry it
+
+**Status:** AUTHORITY (shares); DECISION (cent rounding)
+
+- 26 U.S.C. §704(a) (`sources/irs-partnerships.md`): "A partner's
+  distributive share of income, gain, loss, deduction, or credit shall,
+  except as otherwise provided in this chapter, be determined by the
+  partnership agreement."
+- Form 1065 Schedule M-2: "Show what caused changes during the tax year in
+  the partners' tax-basis capital accounts."
+- **No authority** says how to round a share to the cent. Largest
+  remainder, ties to the earlier member: DECISION (Stephen, 2026-10-13).
+  Closes made before then replay with the last member absorbing it.
+
+**Enforced:** `CloseTo::Members`, `periods::allocate`,
+`kernel::apportion`, `members_equity`. **Checked:** Kani
+`apportion_is_exact`, `apportion_is_fair`; properties `prop_split_*`;
+`closes_journaled_under_the_old_rule_replay_with_it`.
+
+## B-14 Statements: P&L for a period; cash flow by the indirect method
+
+**Status:** AUTHORITY
+
+ASC 230-10-45-28 (cited): an entity not using the direct method "shall
+determine and report the same amount for net cash flow from operating
+activities indirectly by adjusting net income … (the indirect or
+reconciliation method)." ASC 230-10-45-16: "All of the following are cash
+inflows from operating activities: Cash receipts from sales of goods or
+services…". A closing entry is not income or spending (B-11), so period
+statements exclude it.
+
+**Enforced:** `profit_and_loss_for_period`, `cash_flow`. **Checked:** Lean
+`statements_add_up`; `prop_period_pnl_partitions`;
+`cash_flow_reconciles_to_change_in_cash`.
+
+## B-15 Depreciation: straight line, salvage never depreciated, partial months by days
+
+**Status:** CONVENTION (book method); AUTHORITY for tax conventions, which
+wanderbooks does not apply
+
+OpenStax §11.3 (cited): "Straight-line depreciation is a method of
+depreciation that evenly splits the depreciable amount across the useful
+life of the asset," with "(Cost – salvage value)/Useful life"; partial
+periods: "A common method is to allocate depreciation expense based on the
+number of months the asset is owned in a year." wanderbooks prorates
+partial months by days. ASC 360-10-35-4 not yet verified (see README).
+Tax conventions (half-year, mid-month, mid-quarter): IRS Pub. 946
+(`sources/irs-depreciation.md`), for the CPA.
+
+**Enforced:** `assets::depreciation_schedule`. **Checked:**
+`schedule_sums_exactly_to_depreciable_amount`,
+`salvage_value_is_never_depreciated`, `prop_depreciation_schedule_exact`.
+
+## B-16 Prepaid expenses and deferred revenue are recognized over the period benefited or earned
+
+**Status:** AUTHORITY (revenue); CONVENTION (prepaids)
+
+ASC 606-10-45-2 (cited): payment before transfer → "the entity shall
+present the contract as a contract liability"; 606-10-25-23: "An entity
+shall recognize revenue when (or as) the entity satisfies a performance
+obligation by transferring a promised good or service." Prepaids: OpenStax
+§4.2 (cited). Tax: the 12-month rule, Treas. Reg. §1.263(a)-4(f)
+(`sources/irs-capitalization.md`).
+
+**Enforced:** `schedules`. **Checked:** `a_prepaid_expense_is_expensed_month_by_month`,
+`deferred_revenue_is_earned_to_the_cent`.
+
+## B-17 Platform payouts are recorded gross when the business is the principal
+
+**Status:** AUTHORITY
+
+ASC 606-10-55-37 (cited): "An entity is a principal if it controls the
+specified good or service before that good or service is transferred to a
+customer." 606-10-55-38: an agent "recognizes revenue in the amount of any
+fee or commission to which it expects to be entitled." Whether an app
+developer is principal for app-store sales is a judgment under 55-39; the
+CPA confirms.
+
+**Enforced:** `payouts::payout_plan`. **Checked:**
+`a_payout_is_grossed_up_to_revenue_and_fees`.
+
+## B-18 Aging buckets: Current, 1–30, 31–60, 61–90, 90+ days past due
+
+**Status:** CONVENTION (bucket edges); DECISION (due today is Current)
+
+ASC 326-20-55-37/38 (cited) illustrates "one way" to age trade
+receivables with buckets "current … 1–30 days past due … 31–60 … 61–90 …
+more than 90 days past due"; it is illustrative, not a rule. The FFIEC
+Call Report instructions (bank regulators, not binding here): "The past
+due status … should be determined in accordance with its contractual
+repayment terms." A document due today is not yet past due: DECISION
+(Stephen, 2026-10-13).
+
+**Enforced:** `arap::aging_bucket`. **Checked:** `aging_boundaries`,
+`aging_is_exclusive_and_only_ages`.
+
+## B-19 1099 reporting thresholds
+
+**Status:** AUTHORITY (`sources/irs-1099-thresholds.md`)
+
+$600 through 2025; $2,000 for payments made after Dec. 31, 2025 (26 U.S.C.
+§6041(a), §6041A(a)(2), as amended by Pub. L. 119-21 §70433); for calendar
+years after 2026, indexed to inflation and rounded to the nearest $100
+(§6041(h)). Card payments are reported on Form 1099-K, not 1099-NEC/MISC.
+Attorneys' gross proceeds stay at $600 (not modeled).
+
+**Enforced:** `form1099::default_threshold`. **Open:** for 2027 and later
+the indexed amount is not yet published; the engine must not silently
+assume $2,000 (see the open-questions list in the strategy note).
+
+## B-20 Every transaction has supporting documents; records are kept
+
+**Status:** AUTHORITY (`sources/irs-records.md`)
+
+IRS Pub. 583: "In addition, you must keep supporting documents"; they
+"support the entries in your books and on your tax return"; keep records
+"until the period of limitations for that return runs out" (3 years
+generally; 7 for bad debts).
+
+**Enforced:** the MCP receipt policy (not the engine; R-13).
+
+## B-21 Exact amounts in the books; rounding only on returns
+
+**Status:** AUTHORITY (for where rounding happens)
+
+Form 1065 instructions (`sources/irs-partnerships.md`): "If two or more
+amounts are added to figure the amount to enter on a line, include cents
+when adding the amounts and round off only the total." The books keep
+cents (and FX precision) exactly (R-2).
+
+**Enforced:** `Decimal` money, `Amount` checked arithmetic, line range.
+**Checked:** Kani `sums_are_exact`; bridge tests.
+
+## B-22 Expense or capitalize (book policy, mirrors tax)
+
+**Status:** AUTHORITY (`sources/irs-capitalization.md`)
+
+Treas. Reg. §1.263(a)-1(f)(1)(ii)(D) sets $500 per invoice or item for a
+taxpayer without an applicable financial statement "or other amount as
+identified in published guidance"; Notice 2015-82 raised it to $2,500 for
+taxable years beginning on or after January 1, 2016. The 12-month rule:
+§1.263(a)-4(f)(1). The election is made yearly on the return.
+
+**Enforced:** bookkeeper policy (books' AGENTS.md), not the engine.