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, unless the line records its foreign currency, amount, and rate (R-FUTURE-1, done: see below).
• 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 currency's minor unit by largest remainder (the odd cent goes to the largest remainder, ties to the earlier member; the owner, 2026-10-13), earnings not yet closed the way their close will split them (D-38, rules.md B-13), so every row's total is exact and a member's capital on a day never changes when its month is closed. Any equity change the roll-forward doesn't explain is shown as "other", never hidden.
• R-9d — Tax categories. Revenue and expense accounts map to stable tax categories (ledger_core::tax::CATEGORIES: key, label, income / cost of goods / deduction, the returns it appears on — Schedule C, 1065, 1120-S, 1120 — default deductible percent, guidance), with an optional per-account deductible percent. tax_summary(start, end, form) groups the P&L by category with book and deductible amounts and lists uncategorized accounts. Book basis only: no tax depreciation, basis, or filing; not tax advice.
• 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 server (not the engine — the engine stays policy-free) enforces the books' evidence policy: postings at or above a threshold (the journaled setting policy.evidence.threshold, with required and exempt accounts; P1, rules.md B-29) must have at least one attached receipt. Evaluated by ledger-config's ReceiptPolicy today; P4 moves the evaluation into ledger_core::evidence so the store, the server and the viewer call one function (plan I-5, D-47: reversals, closes, schedule and depreciation runs are exempt by origin). 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. Explicitly declined as bloat. (Scheduled transactions, the other half of R-FUTURE-6, are done: see below.)

Promoted from future (done)

• R-? — Cash flow statement (direct method, with the reconciliation of net income to operating cash and the noncash investing and financing activities; rules.md B-14, P3 defect 1). 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_to(id, to); closed periods reject new entries. The closing entry, dated at period end, zeroes each revenue and expense account's balance as of the period end (later-dated entries belong to later periods) and puts the net in to: CloseTo::RetainedEarnings (3999, the corporate convention; close_period is shorthand) or CloseTo::Members (each member's capital account by share, to the currency's minor unit, odd units by largest remainder, cumulatively from the first members close with these members and shares, so no member is ever a unit from their exact share: the partnership convention, rules.md B-13; closes journaled under earlier rules replay with the rule they were made under: CloseTo::MembersRun, the run rule of 2026-10-13 to P3, CloseTo::MembersPerClose, and before 2026-10-13 the last member absorbing rounding), or CloseTo::Account (any equity account, e.g. a sole proprietor's capital). Every target can sweep owner-pay equity accounts — draws, distributions, dividends — into it: a member's distributions account into their own capital. The members' equity statement counts a member's distributions account as part of their capital. Periods close in order (CloseOutOfOrder). The journal records the target, and replay re-derives the closing entry and checks every line against the journal.
• R-? — Prepaid expenses, deferred revenue, and recurring entries. Was part of R-FUTURE-6 ("scheduled transactions"). Amortization schedules post monthly, equal to the cent, idempotently, honoring closed periods; the journal records each posting with its full entry and replay checks it. Recurring entries generate drafts only, never posts, so the receipt policy always applies.
• R-? — Payout gross-up. Platform deposits are recorded gross: revenue, fees, and adjustments, reconciled to the deposit to the cent, as a draft that carries the payout statement as its receipt.
• R-? — 1099 tracking. Vendors carry the information return they get and whether a W-9 is on file (never the TIN). Entries carry the vendor they paid; bills, bill payments, and reversals carry it automatically. The year's worksheet counts cash paid (asset-account credits minus debits), so card payments are excluded, against a year-dependent, overridable threshold. Schema v7.
• 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. Since P4b S1 (D-45, rules.md B-38): a document's figures are the signed sum of its tagged ledger lines dated on or before the day asked about, so reversals, voids and write-offs are right by construction; a hand line on a control account is refused; books.control_check ties the subledger to the control account. S4 to S7 add terms, numbers, line accounts, the issued PDF, sends, settlements with discounts and the processor's fee, and bad debts, behind the documents_v2 journal feature.
• 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 (and the viewer's Export menu, D-29): a zip, built by ledger-package for both, as of a day (B-33), with the trial balance and general ledger as XLSX, the statements as Typst PDFs, the journal as IIF (B-34), every receipt behind the period's entries with an index, the company's documents, the 1099 worksheet, the members' equity and K-1 worksheets (book and tax basis, B-36), and a README; handed over as a download (D-46).

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.