wanderbooks/docs/requirements.md

# Requirements — accounting semantics (Phase 1)

Numbered requirements for the engine. `R-N` is current scope; `R-FUTURE-N`
is explicitly out of scope for now but designed for. Agents: if code and a
requirement conflict, the requirement wins.

## Core double-entry

- **R-1 — Balanced entries.** Every journal entry has at least two lines and
  total debits exactly equal total credits (`Decimal` equality, no epsilon).
  Unbalanced entries are rejected at post time with the offending totals.
- **R-2 — Exact arithmetic.** All money is `Decimal`. No binary floats in any
  money path. No silent rounding: amounts are exact end to end. (Presentation
  rounding, when the UI arrives, is half-up to the currency's minor unit and
  is a display concern only.)
- **R-3 — Immutability.** Posted entries cannot be edited or deleted. The only
  correction mechanism is a reversing entry (same lines, sides flipped)
  linked via `reversal_of`. Draft → Posted is one-way.
- **R-4 — Chart of accounts.** Five closed types (Asset, Liability, Equity,
  Revenue, Expense) with fixed normal sides (debit-normal: Asset, Expense;
  credit-normal: Liability, Equity, Revenue). Codes are unique and non-empty.
  Accounts may have parents (hierarchy). Placeholder (header) accounts
  organize the chart and reject postings.
- **R-5 — Single currency per ledger (day one).** Every account and every
  journal line uses the ledger's base currency. Anything else is rejected,
  not converted. Multi-currency with translation is R-FUTURE-1.
- **R-6 — Line hygiene.** Zero-amount lines are rejected, not ignored.
  Unknown accounts are rejected. Single-line entries are rejected.

## Reports

- **R-7 — Trial balance.** Every non-zero, non-placeholder account appears
  with its debit or credit balance, sorted by code. Total debits must equal
  total credits (the `balanced()` check).
- **R-8 — Balance sheet.** Assets, liabilities, equity grouped by account
  type. The accounting equation holds exactly: assets = liabilities + equity.
  Current earnings (revenue minus expenses not yet closed to retained
  earnings) are folded into equity so the equation holds on a live book.
  `balance_sheet_as_of` gives the statement as of any date, a line per
  account, counting every entry dated on or before it (closing entries
  included: after a close the earnings sit in retained earnings).
- **R-9 — Profit and loss.** Revenue and expenses with net income.
  `profit_and_loss_for_period` scopes it to a date range (optionally one
  class), a line per account, and **excludes closing entries**: a close moves
  earnings into retained earnings and must not make a closed period read as
  break-even. The cash flow statement excludes closing entries for the same
  reason. Period P&Ls partition: split a range anywhere and the halves sum
  to the whole, and a range's net income equals the change in current
  earnings across it (property-tested).
- **R-9a — General ledger.** `general_ledger(start, end)`: by account in
  code order, each with its beginning balance, every posting in the period
  (date, entry, description, debit, credit, running balance on the account's
  normal side), and its ending balance, which ties to the trial balance as
  of `end`. Each posting names its *split*: the one account on the entry's
  opposite side, or "-Split-" when that side has several (the QuickBooks
  convention). The entry-ordered listing is the *general journal*, a
  different report.
- **R-9b — Trial balance as of a date.** `trial_balance_as_of(as_of)`.
- **R-9c — Statement of changes in members' equity.** For a multi-member LLC
  (partnership): each member's capital roll-forward — beginning,
  contributions (credits to their capital account), allocated net income
  (loss), distributions (debits), ending — plus a total that equals
  balance-sheet equity. Earnings not yet distributed (retained earnings and
  unclosed income) and the period's income are allocated by ownership share
  to the cent, the last member absorbing rounding, so every row's total is
  exact. Any equity change the roll-forward doesn't explain is shown as
  "other", never hidden.
- **R-10 — Canonical snapshots.** `reports::snapshot()` renders the three
  core reports as deterministic JSON (decimal strings, sorted lines, fixed
  keys). Two engines fed the same books must produce identical output. This
  is the oracle interchange format.

## Auditability

- **R-11 — Append-only log.** Posted entries are kept in posting order. The
  log plus the chart fully determine every report.
- **R-12 — Command surface.** All mutations go through `Ledger` methods.
  There is no second way to change the books.

## Receipt policy (MCP phase)

- **R-13a — Receipt corrections.** Posted entries are immutable (R-3); their
  evidence is not frozen but is append-only. A receipt is replaced by
  attaching the new one and unlinking the old with a reason; unwanted
  receipts and documents are withdrawn with a reason. Unlinking may never
  leave an entry the policy (R-13) requires a receipt for with none. Every
  step is a journal event; no blob is deleted.
- **R-13 — Receipt enforcement.** The MCP layer (not the engine — the engine
  stays policy-free) enforces a configurable receipt policy: postings at or
  above a threshold (`require_receipts_above`, default `"25.00"` in base
  currency) must have at least one attached receipt, with per-account
  overrides. `post_entry` with `confirmed: true` refuses with a typed
  `receipt_required` error otherwise. The draft preview always includes the
  receipt checklist (`attached: [...]`, `required_but_missing: bool`), so the
  human sees it before confirming. Full spec: `docs/mcp-interface.md`.

## Explicitly future work

- **R-FUTURE-6 — Budgets and scheduled transactions.** (Budgets explicitly
  declined as bloat; scheduled transactions remain future.)

## Promoted from future (done)

- **R-? — Cash flow statement** (indirect method). Was R-FUTURE-3.
  `ledger-core::reports::cash_flow` + `books.cash_flow`.
- **R-? — QuickBooks-compatible import/export.** Was R-FUTURE-4.
  `ledger-import` crate: CSV bank/chart import, IIF and XLSX export.
- **R-? — Multi-currency (foreign-currency lines).** Was R-FUTURE-1.
  `JournalLine` carries optional foreign currency/amount; `amount` is the
  base-currency equivalent. `Ledger::add_line_fx`, `Ledger::set_fx_rate`.
  Reports work in base currency. (Full per-account currencies and translation
  remain future.)
- **R-? — Periods and close.** Was R-FUTURE-2.
  `ledger-core::periods`: `create_period`, `close_period` (posts closing
  entry to `3999` Retained Earnings), closed periods reject new entries.
- **R-? — A/R and A/P workflows.** Was R-FUTURE-5.
  `ledger-core::arap`: customers, vendors, invoices, bills, payments,
  AR/AP aging. MCP tools for the full workflow.
- **R-? — Bank reconciliation.** Cleared flags on posted lines,
  `reconciliation_report` with uncleared-line detail.
- **R-? — Payroll (accounting only).** `ledger-core::payroll`:
  `run_payroll` posts one balanced entry (Dr 6100 gross, Dr 6110 employer
  FICA, Cr 2110–2150 payables, Cr cash net); `remit_payroll_taxes` clears
  the payables. No tax tables — the caller supplies every number.
- **R-? — Tracking classes (divisional P&L).** `ledger-core::classes`:
  `JournalLine.class_id`, `add_class`, `set_line_class` (drafts only),
  `profit_and_loss_filtered`, `profit_and_loss_by_class`. Shared costs are
  split explicitly across lines at entry time.
- **R-? — CPA handoff package.** `books.export_cpa_package`: zip with
  trial-balance XLSX, general-ledger XLSX (every posted line), P&L and
  balance-sheet PDFs (printpdf, MIT).

## Non-goals (all phases of the engine)

The engine never does I/O, networking, wall-clock time sourcing, or UI. It is
a pure domain library: data in, validated books out.