feat(arap): write off a bad debt in the engine (P4b S7)
An invoice that will not be collected comes off the receivables and is deducted, the direct write-off method the owner chose (A-5; IRC §166(a); Treas. Reg. §1.166-1(e), -2(a), -3(a); rules.md B-41). Ledger::write_off posts one balanced entry, Dr 6990 Bad Debt Expense / Cr 1200 Accounts Receivable, its receivable line tagged WriteOff so the figures stay derived: what the invoice owes falls and what was written off rises, and a reversal re-instates it without a new movement (D-49). The amount is at most what is owed, and at most the least owed on any day from the write-off's on: a later payment can't leave the invoice owing less than nothing (B-38 INVARIANT 2). A partial write-off is allowed, as §1.166-3(a) allows to the extent charged off. Cash-basis books refuse it: an invoice never counted as income has no basis to deduct (§1.166-1(e)). The bad_debts role (6990) is a control role, so the account is created on demand and can be assigned like the others. The same-year recovery D-49 records is a reversal of the write-off and then a payment; a later year is a plain entry, and needs no movement. Tests: half_paid_rest_written_off_is_written_off, write_off_refused_on_cash_basis, write_off_above_outstanding_refused, write_off_then_recovery_same_year.
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@@ -1200,6 +1200,206 @@ fn a_chain_counts_in_order() {
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assert!(b.l.stands_on(rr, d(2026, 1, 25)));
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}
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// ---------------------------------------------------------------------------
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// Write-offs (plan P4b S7; rules.md B-41)
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// ---------------------------------------------------------------------------
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/// B-38 SCENARIO 7 and B-41 INVARIANT 1: half of an invoice paid, the rest
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/// written off, reads Written off with 50 paid and 50 written off, and
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/// receivables falls by the write-off alone.
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#[test]
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fn half_paid_rest_written_off_is_written_off() {
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let mut b = books();
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let inv =
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b.l.create_invoice(
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b.customer,
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d(2026, 1, 5),
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d(2026, 2, 4),
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line("Design", 10_000),
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)
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.unwrap();
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b.l.receive_payment(inv, d(2026, 1, 20), cents(5_000), b.bank)
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.unwrap();
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let ar = b.l.chart().find_by_code("1200").unwrap().id;
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let before = b.l.account_balance(ar).unwrap();
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let entry =
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b.l.write_off(inv, d(2026, 1, 31), cents(5_000), "collection exhausted")
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.unwrap();
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// One balanced entry: Dr 6990 Bad Debt Expense / Cr 1200.
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let e = b.l.get_entry(entry).unwrap();
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assert_eq!(e.lines().len(), 2);
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let bad = b.l.chart().find_by_code("6990").unwrap().id;
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assert_eq!(
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(
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b.l.get_entry(entry).unwrap().lines()[0].account,
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b.l.get_entry(entry).unwrap().lines()[0].side,
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b.l.get_entry(entry).unwrap().lines()[0].amount.amount
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),
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(bad, Side::Debit, cents(5_000))
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);
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assert_eq!(
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b.l.line_doc(entry, 1).map(|t| t.movement),
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Some(Movement::WriteOff)
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);
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assert_eq!(
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b.l.account_balance(ar).unwrap(),
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before.checked_sub(cents(5_000)).unwrap()
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);
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let st = b.l.invoice_state(inv, d(2026, 2, 1)).unwrap().unwrap();
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assert_eq!(st.status, DocStatus::WrittenOff);
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assert_eq!(
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(st.paid, st.written_off, st.outstanding),
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(cents(5_000), cents(5_000), Decimal::ZERO)
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);
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// The write-off counts toward no payment: the customer paid 50.
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assert_eq!(
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b.l.payments_recorded(DocRef::Invoice(inv)),
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Ok(cents(5_000))
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);
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// And the control account still equals its documents.
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let check = b.l.control_check(d(2026, 2, 1)).unwrap();
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assert!(check.iter().all(|c| c.difference.is_zero()));
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}
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/// B-41 INVARIANT 3: a cash-basis company never counted the invoice as
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/// income, so it has no basis to deduct (IRC §166; Treas. Reg.
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/// §1.166-1(e)).
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#[test]
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fn write_off_refused_on_cash_basis() {
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use ledger_core::settings::{Change, Source};
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let mut b = books();
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let src = Source {
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decided_by: "Owner".into(),
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decided_on: d(2026, 1, 1),
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citation: None,
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note: None,
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};
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let changes =
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b.l.check_settings(
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&[Change {
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key: "books.accounting_basis".into(),
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value: Some(serde_json::json!("cash")),
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}],
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&src,
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)
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.unwrap();
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b.l.apply_settings(&changes, &src, 1).unwrap();
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let inv =
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b.l.create_invoice(
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b.customer,
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d(2026, 1, 5),
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d(2026, 2, 4),
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line("Design", 10_000),
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)
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.unwrap();
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let before = ledger_core::reports::snapshot(&b.l).unwrap();
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let err =
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b.l.write_off(inv, d(2026, 1, 31), cents(1_000), "uncollectible")
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.unwrap_err();
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assert!(matches!(err, LedgerError::WriteOffOnCashBasis), "{err}");
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// Nothing changed, no draft left behind.
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assert_eq!(ledger_core::reports::snapshot(&b.l).unwrap(), before);
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assert_eq!(
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b.l.invoice_state(inv, d(2026, 2, 1))
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.unwrap()
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.unwrap()
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.status,
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DocStatus::Open
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);
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}
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/// B-41 INVARIANT 1: at most what is owed, a partial write-off allowed
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/// (Treas. Reg. §1.166-3(a)); more is refused, naming what is owed, and
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/// nothing changes.
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#[test]
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fn write_off_above_outstanding_refused() {
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let mut b = books();
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let inv =
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b.l.create_invoice(
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b.customer,
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d(2026, 1, 5),
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d(2026, 2, 4),
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line("Design", 10_000),
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)
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.unwrap();
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b.l.receive_payment(inv, d(2026, 1, 20), cents(4_000), b.bank)
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.unwrap();
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let before = ledger_core::reports::snapshot(&b.l).unwrap();
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// 60 is owed on the day; 60.01 is not.
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let err =
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b.l.write_off(inv, d(2026, 1, 31), cents(6_001), "uncollectible")
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.unwrap_err();
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assert!(
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matches!(&err, LedgerError::InvalidWriteOff(why) if why.contains("60")),
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"{err}"
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);
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assert_eq!(ledger_core::reports::snapshot(&b.l).unwrap(), before);
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// Zero and a negative amount are refused too.
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for amount in [Decimal::ZERO, cents(-1)] {
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assert!(matches!(
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b.l.write_off(inv, d(2026, 1, 31), amount, "uncollectible"),
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Err(LedgerError::InvalidWriteOff(_))
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));
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}
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assert_eq!(ledger_core::reports::snapshot(&b.l).unwrap(), before);
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// What is owed on the day is taken, and the invoice reads partly paid
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// and partly written off.
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b.l.write_off(inv, d(2026, 1, 31), cents(6_000), "uncollectible")
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.unwrap();
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let st = b.l.invoice_state(inv, d(2026, 2, 1)).unwrap().unwrap();
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assert_eq!(st.status, DocStatus::WrittenOff);
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assert_eq!((st.paid, st.written_off), (cents(4_000), cents(6_000)));
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}
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/// D-49's same-year recovery, and B-41 INVARIANT 2: reversing the
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/// write-off re-instates the debt (it is not a new movement), and the
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/// payment then recorded settles it; a recovery is income, never a
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/// payment event.
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#[test]
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fn write_off_then_recovery_same_year() {
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let mut b = books();
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let inv =
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b.l.create_invoice(
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b.customer,
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d(2026, 1, 5),
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d(2026, 2, 4),
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line("Design", 10_000),
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)
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.unwrap();
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let write_off =
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b.l.write_off(inv, d(2026, 1, 31), cents(10_000), "uncollectible")
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.unwrap();
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assert_eq!(
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b.l.invoice_state(inv, d(2026, 2, 1))
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.unwrap()
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.unwrap()
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.status,
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DocStatus::WrittenOff
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);
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// The recovery came in the same tax year: reverse the write-off, and
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// the invoice reopens.
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b.l.reverse_entry(write_off, d(2026, 3, 1), "paid after all")
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.unwrap();
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let st = b.l.invoice_state(inv, d(2026, 3, 2)).unwrap().unwrap();
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assert_eq!(
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(st.status, st.written_off, st.outstanding),
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(DocStatus::Open, Decimal::ZERO, cents(10_000))
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);
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// Then the payment is recorded as any payment.
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b.l.receive_payment(inv, d(2026, 3, 2), cents(10_000), b.bank)
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.unwrap();
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let st = b.l.invoice_state(inv, d(2026, 3, 3)).unwrap().unwrap();
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assert_eq!(
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(st.status, st.paid, st.written_off),
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(DocStatus::Paid, cents(10_000), Decimal::ZERO)
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);
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// Receivables is back to nothing, and the write-off entry no longer
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// stands (posted is forever: it is reversed, never deleted).
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let ar = b.l.chart().find_by_code("1200").unwrap().id;
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assert_eq!(b.l.account_balance(ar).unwrap(), Decimal::ZERO);
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assert!(!b.l.in_effect(write_off));
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}
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// ---------------------------------------------------------------------------
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// Properties
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// ---------------------------------------------------------------------------
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