# Work on spec: its costs are expenses when incurred, and the hoped-for
# payment is income only when received; until then it is no receivable.
#
# wanderbooks: rules.md B-37 item 4; regression tests
# `unrecovered_cost_only_for_on_spec_and_never_negative` (ledger-core),
# `on_spec_project_shows_unrecovered_cost_and_others_null` (ledger-mcp).
#
# Expected values worked by hand: 1,400.00 + 60.00 = 1,460.00 of costs,
# nothing receivable (1100 stays 0.00). Repaid 1,000.00: 460.00 still
# unrecovered. Repaid 700.00 more: 1,700.00 in, 240.00 net, nothing
# unrecovered (never below zero).
#
# Both sources are quoted through Deloitte's DART roadmaps and not yet
# re-read in the ASC basic view (wanderbooks docs/spec/sources/fasb-asc.md):
# an open item.

id = "projects-on-spec-costs-are-expenses"
title = "On-spec costs are expenses; a repayment is income when received"
rule = "The costs of work done on spec MUST be expensed as incurred, and a payment hoped for MUST NOT be recorded, as a receivable or as income, until it is received; a project's unrecovered cost MUST be its tagged expenses less its tagged revenue to date, never below zero."
status = "AUTHORITY"
sources = [
  "ASC 450-30-25-1: a contingency that might result in a gain usually is not reflected in the financial statements, since that might recognize revenue before its realization (originally FAS 5 ¶17(a))",
  "ASC 340-40-25-5: costs to fulfill an anticipated contract are an asset only if, among other criteria, they are expected to be recovered (here recovery is uncertain: expensed; wanderbooks docs/spec/rules.md B-22)",
]
tags = ["projects", "on-spec", "gain-contingency", "accrual"]

[setup]
currency = "USD"
fiscal_year_start = "01-01"
basis = "accrual"
rounding = "half-even"

[[setup.accounts]]
code = "1000"
name = "Cash"
type = "asset"
[[setup.accounts]]
code = "1100"
name = "Accounts Receivable"
type = "asset"
[[setup.accounts]]
code = "4000"
name = "Revenue"
type = "revenue"
[[setup.accounts]]
code = "6000"
name = "Contractors"
type = "expense"
[[setup.accounts]]
code = "6100"
name = "Hosting"
type = "expense"

[[setup.projects]]
name = "Harbor app"
kind = "on_spec"

[[events]]
date = "2026-04-02"
description = "Prototype build"
lines = [
  { account = "6000", side = "debit", amount = "1400.00", project = "Harbor app" },
  { account = "1000", side = "credit", amount = "1400.00" },
]
[[events]]
date = "2026-04-20"
description = "Hosting for the prototype"
lines = [
  { account = "6100", side = "debit", amount = "60.00", project = "Harbor app" },
  { account = "1000", side = "credit", amount = "60.00" },
]
[[events]]
date = "2026-06-15"
description = "Harbor repays part of the prototype"
lines = [
  { account = "1000", side = "debit", amount = "1000.00" },
  { account = "4000", side = "credit", amount = "1000.00", project = "Harbor app" },
]
[[events]]
date = "2026-07-01"
description = "Harbor pays the rest, and more"
lines = [
  { account = "1000", side = "debit", amount = "700.00" },
  { account = "4000", side = "credit", amount = "700.00", project = "Harbor app" },
]

[[expect]]
query = "project"
after = 2
project = "Harbor app"
from = "2026-01-01"
to = "2026-04-30"
[expect.values]
revenue = "0.00"
expenses = "1460.00"
net = "-1460.00"
"to_date.revenue" = "0.00"
"to_date.expenses" = "1460.00"
"to_date.net" = "-1460.00"
unrecovered_cost = "1460.00"

[[expect]]
query = "balances"
after = 2
as_of = "2026-04-30"
[expect.values]
"1100" = "0.00"
"6000" = "1400.00"
"6100" = "60.00"

[[expect]]
query = "project"
after = 3
project = "Harbor app"
from = "2026-01-01"
to = "2026-06-30"
[expect.values]
revenue = "1000.00"
expenses = "1460.00"
net = "-460.00"
"to_date.revenue" = "1000.00"
"to_date.expenses" = "1460.00"
"to_date.net" = "-460.00"
unrecovered_cost = "460.00"

[[expect]]
query = "project"
project = "Harbor app"
from = "2026-01-01"
to = "2026-12-31"
[expect.values]
revenue = "1700.00"
expenses = "1460.00"
net = "240.00"
"to_date.revenue" = "1700.00"
"to_date.expenses" = "1460.00"
"to_date.net" = "240.00"
unrecovered_cost = "0.00"