jaz-cli 2.2.1 → 2.5.0

package/assets/skills/transaction-recipes/references/bad-debt-provision.md

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+# Recipe: Bad Debt Provision / Expected Credit Loss (IFRS 9)
+
+## Scenario
+
+Your company has $185,000 in trade receivables across five aging buckets. IFRS 9.5.5.15 requires you to recognize lifetime expected credit losses using the simplified approach (provision matrix). You apply historical loss rates to each aging bucket, calculate the total required allowance, compare it to the existing provision balance, and post a journal for the difference.
+
+**Pattern:** Manual journal + capsule (provision amount recalculated each quarter)
+
+---
+
+## Accounts Involved
+
+| Account | Type | Subtype | Role |
+|---|---|---|---|
+| Bad Debt Expense | Expense | Expense | Period charge for provision increase |
+| Allowance for Doubtful Debts | Asset | Current Asset (contra) | Contra-asset reducing receivables on balance sheet |
+| Accounts Receivable | Asset | Current Asset | Trade receivables (affected on write-off only) |
+
+> **Note on write-offs:** When a specific debt is confirmed uncollectible, the write-off journal is: Dr Allowance for Doubtful Debts / Cr Accounts Receivable. Use the `DEBT_WRITE_OFF` payment method in Jaz to record this against the specific invoice.
+
+---
+
+## Journal Entries
+
+### Step 1: Calculate Provision Matrix
+
+Run the aged receivables report and apply loss rates:
+
+| Aging Bucket | Balance | Loss Rate | ECL |
+|---|---|---|---|
+| Current (not overdue) | | *%* | |
+| 1-30 days overdue | | *%* | |
+| 31-60 days overdue | | *%* | |
+| 61-90 days overdue | | *%* | |
+| 91+ days overdue | | *%* | |
+| **Total** | | | **Total ECL** |
+
+### Step 2: Provision Adjustment
+
+```
+Adjustment = Total ECL − Existing Provision Balance
+```
+
+**If increase (ECL > existing provision):**
+
+| Line | Account | Debit | Credit |
+|---|---|---|---|
+| 1 | Bad Debt Expense | *adjustment* | |
+| 2 | Allowance for Doubtful Debts | | *adjustment* |
+
+**If release (ECL < existing provision):**
+
+| Line | Account | Debit | Credit |
+|---|---|---|---|
+| 1 | Allowance for Doubtful Debts | *adjustment* | |
+| 2 | Bad Debt Expense | | *adjustment* |
+
+### Step 3: Write-Off (when confirmed uncollectible)
+
+Use the `DEBT_WRITE_OFF` payment method against the specific invoice:
+
+| Line | Account | Debit | Credit |
+|---|---|---|---|
+| 1 | Allowance for Doubtful Debts | *write-off amount* | |
+| 2 | Accounts Receivable | | *write-off amount* |
+
+---
+
+## Capsule Structure
+
+**Capsule:** "ECL Provision — Q4 2025"
+**Capsule Type:** "ECL Provision"
+
+Contents:
+- 1 provision adjustment journal per quarter
+- Write-off entries as they occur
+- **Total entries:** Varies (typically 1 per quarter + write-offs)
+
+---
+
+## Worked Example
+
+**Setup:**
+- Reporting date: December 31, 2025
+- Existing provision balance: $3,000
+
+**Aged receivables and loss rates:**
+
+| Aging Bucket | Balance | Loss Rate | ECL |
+|---|---|---|---|
+| Current | $100,000 | 0.5% | $500 |
+| 1-30 days | $50,000 | 2% | $1,000 |
+| 31-60 days | $20,000 | 5% | $1,000 |
+| 61-90 days | $10,000 | 10% | $1,000 |
+| 91+ days | $5,000 | 50% | $2,500 |
+| **Total** | **$185,000** | **3.24%** | **$6,000** |
+
+**Adjustment:**
+```
+Required provision: $6,000
+Existing provision: $3,000
+Increase needed:    $3,000
+```
+
+**Dec 31, 2025 — Provision journal:**
+- Dr Bad Debt Expense $3,000
+- Cr Allowance for Doubtful Debts $3,000
+- Description: "ECL provision increase — Q4 2025"
+- Assign to capsule
+
+**Use the calculator:** `jaz calc ecl --current 100000 --30d 50000 --60d 20000 --90d 10000 --120d 5000 --rates 0.5,2,5,10,50 --existing-provision 3000`
+
+---
+
+## Enrichment Suggestions
+
+| Enrichment | Value | Why |
+|---|---|---|
+| Tracking Tag | "ECL" | Filter all provision-related entries |
+| Tracking Tag | "Bad Debt" | Broader filter including write-offs |
+| Custom Field | "Reporting Period" → "Q4 2025" | Link to specific reporting quarter |
+| Custom Field | "Aged Receivables Report Date" → "2025-12-31" | Audit trail to source report |
+
+---
+
+## Verification
+
+1. **Trial Balance** → Allowance for Doubtful Debts should equal the Total ECL amount ($6,000) after the adjustment.
+2. **P&L for the quarter** → Bad Debt Expense shows only the delta ($3,000), not the full provision.
+3. **Balance Sheet** → Accounts Receivable minus Allowance for Doubtful Debts = net realizable value ($185,000 − $6,000 = $179,000).
+4. **Group General Ledger by Capsule** → Shows all provision adjustments and write-offs for the period.
+
+---
+
+## Variations
+
+**First-time adoption:** If no existing provision, the full ECL amount is the initial charge. No "adjustment" calculation needed — just post the total.
+
+**Quarterly vs. annual:** IFRS 9 requires assessment at each reporting date. Listed companies do quarterly; SMEs typically do semi-annually or annually. Adjust frequency to match your reporting calendar.
+
+**Specific provision overlay:** In addition to the matrix (general provision), you may identify specific receivables that require a higher provision (e.g., a customer in bankruptcy). Add the specific overlay amount to the matrix total.
+
+**Recovery of written-off debt:** If a previously written-off customer pays, record: Dr Cash / Cr Bad Debt Expense (or Cr Allowance). This can be handled as a regular receipt against the original invoice using the "Payment" method in Jaz.
+
+**Loss rate calibration:** Loss rates should be based on historical data (typically 3-5 years of actual write-offs by aging bucket). Forward-looking adjustments may be needed for macroeconomic conditions (IFRS 9.5.5.17).

package/assets/skills/transaction-recipes/references/bank-loan.md

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+# Recipe: Bank Loan
+
+## Scenario
+
+Your company takes a $100,000 bank loan at 6% annual interest, repaid in 60 equal monthly installments of $1,933.28. Each payment splits between principal (reducing the loan balance) and interest (expense), with the split changing every month as the outstanding balance decreases.
+
+**Pattern:** Manual journals + capsule (interest amount changes each period)
+
+---
+
+## Accounts Involved
+
+| Account | Type | Subtype | Role |
+|---|---|---|---|
+| Loan Payable | Liability | Non-Current Liability | Long-term portion of loan balance |
+| Loan Payable (Current) | Liability | Current Liability | Portion due within 12 months |
+| Interest Expense | Expense | Expense | Monthly interest charge |
+| Cash / Bank Account | Asset | Bank | Receives disbursement, makes payments |
+
+> **Note on current/non-current split:** For simplicity, this recipe uses a single "Loan Payable" account. In practice, you may maintain two accounts and periodically reclassify the next 12 months' principal as current. A year-end reclassification journal (Dr Loan Payable Non-Current / Cr Loan Payable Current) can be added to the capsule.
+
+---
+
+## Journal Entries
+
+### Step 1: Loan Disbursement (Day 1)
+
+| Line | Account | Debit | Credit |
+|---|---|---|---|
+| 1 | Cash / Bank Account | $100,000 | |
+| 2 | Loan Payable | | $100,000 |
+
+### Step 2: Monthly Payment (each month)
+
+Each payment is a fixed installment of $1,933.28, split as follows:
+
+| Line | Account | Debit | Credit |
+|---|---|---|---|
+| 1 | Loan Payable | *principal portion* | |
+| 2 | Interest Expense | *interest portion* | |
+| 3 | Cash / Bank Account | | $1,933.28 |
+
+**Calculation per month:**
+- Monthly rate = 6% / 12 = 0.5%
+- Interest = Outstanding balance × 0.005
+- Principal = $1,933.28 − Interest
+- New balance = Outstanding balance − Principal
+
+---
+
+## Capsule Structure
+
+**Capsule:** "Bank Loan — ABC Bank — 2025"
+**Capsule Type:** "Loan Repayment"
+
+Contents:
+- 1 disbursement journal
+- 60 monthly payment journals
+- Optional: year-end current/non-current reclassification journals
+- **Total entries:** 61+
+
+---
+
+## Worked Example
+
+**Loan terms:**
+- Principal: $100,000
+- Annual rate: 6% (monthly rate: 0.5%)
+- Term: 60 months
+- Fixed installment: $1,933.28
+
+**Monthly installment formula:**
+```
+PMT = P × r / (1 − (1 + r)^−n)
+PMT = 100,000 × 0.005 / (1 − 1.005^−60)
+PMT = 500 / 0.2586 = $1,933.28
+```
+
+### Amortization Table (first 6 months + last 2)
+
+| Month | Opening Balance | Interest (0.5%) | Principal | Closing Balance |
+|---|---|---|---|---|
+| 1 | $100,000.00 | $500.00 | $1,433.28 | $98,566.72 |
+| 2 | $98,566.72 | $492.83 | $1,440.45 | $97,126.27 |
+| 3 | $97,126.27 | $485.63 | $1,447.65 | $95,678.62 |
+| 4 | $95,678.62 | $478.39 | $1,454.89 | $94,223.73 |
+| 5 | $94,223.73 | $471.12 | $1,462.16 | $92,761.57 |
+| 6 | $92,761.57 | $463.81 | $1,469.47 | $91,292.10 |
+| ... | ... | ... | ... | ... |
+| 59 | $3,847.42 | $19.24 | $1,914.04 | $1,933.38 |
+| 60 | $1,933.38 | $9.67 | $1,923.61 | $0.00* |
+
+> *Final payment may need a small rounding adjustment (±$0.10) to close the balance exactly to zero.
+
+**Month 1 journal entry:**
+- Dr Loan Payable $1,433.28
+- Dr Interest Expense $500.00
+- Cr Cash $1,933.28
+- Description: "Loan payment — Month 1 of 60 (ABC Bank)"
+- Assign to capsule
+
+**Month 6 journal entry:**
+- Dr Loan Payable $1,469.47
+- Dr Interest Expense $463.81
+- Cr Cash $1,933.28
+- Description: "Loan payment — Month 6 of 60 (ABC Bank)"
+- Assign to capsule
+
+**Totals over 60 months:**
+- Total payments: $1,933.28 × 60 = $115,996.80
+- Total interest: $15,996.80
+- Total principal: $100,000.00
+
+---
+
+## Enrichment Suggestions
+
+| Enrichment | Value | Why |
+|---|---|---|
+| Tracking Tag | "Bank Loan" | Filter all loan-related transactions |
+| Nano Classifier | Facility → "Term Loan" | Distinguish from revolving credit or overdraft |
+| Custom Field | "Loan Reference" → "LN-2025-0042" | Record the bank's loan reference number |
+
+---
+
+## Verification
+
+1. **Group General Ledger by Capsule** → Shows disbursement + all payments. Loan Payable should start at $100,000 credit and reduce to $0 by month 60.
+2. **Trial Balance at any date** → Loan Payable balance should match the "Closing Balance" column in the amortization table for that month.
+3. **P&L for Year 1** → Interest Expense = sum of interest column for months 1–12 (approximately $5,580).
+4. **Cash movement** → Cash decreased by $1,933.28 × number of payments made, offset by the initial $100,000 disbursement.
+
+---
+
+## Variations
+
+**Variable rate loan:** Recalculate the installment amount whenever the rate changes. The capsule still holds all entries. Note in the journal description when the rate changed.
+
+**Lump-sum principal repayment:** Record an additional journal: Dr Loan Payable / Cr Cash for the lump sum. Recalculate remaining monthly installments based on the new balance.
+
+**Interest-only period:** During interest-only months, the journal is: Dr Interest Expense / Cr Cash (no principal portion). Once amortization begins, switch to the split format.
+
+**Multi-currency loan:** If the loan is in USD but base currency is SGD, record the disbursement with `currency: { sourceCurrency: "USD" }`. Monthly payments should use the spot rate on payment date. FX gains/losses are captured automatically.
+
+**Fees:** Loan origination fees can be recorded as a separate journal in the capsule: Dr Loan Origination Fee (expense or amortized asset) / Cr Cash.

package/assets/skills/transaction-recipes/references/building-blocks.md

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+# Building Blocks
+
+The Jaz features that transaction recipes combine to model complex, multi-period accounting scenarios.
+
+---
+
+## Capsules — Workflow Containers
+
+Capsules group related transactions into a single logical unit for a specific accounting workflow. They are **not** a classification tool — they represent the full lifecycle of a business event.
+
+**How capsules work in recipes:**
+- Create one capsule per scenario instance (e.g., "FY2025 Office Insurance")
+- Assign the initial transaction (bill, invoice, or journal) to the capsule
+- Assign the scheduler (if any) to the same capsule — every entry it generates automatically lands in that capsule
+- For manual journal recipes, assign each monthly journal to the capsule as you create it
+
+**Capsule Types** are labels that categorize capsules. Create types that match your recipes:
+- Prepaid Expenses
+- Deferred Revenue
+- Accrued Expenses
+- Loan Repayment
+- Lease Accounting (IFRS 16)
+- Depreciation (Non-Standard)
+- FX Revaluation
+- ECL Provision
+- Employee Benefits
+- Provisions
+- Dividends
+- Intercompany
+- Capital Projects
+
+**Reporting:** Capsules are the **only enrichment that supports group-by** in the General Ledger. Grouping by capsule shows the complete lifecycle of a multi-step transaction in one view.
+
+**API:** `POST /capsules`, `POST /capsuleTypes`, `POST /capsuleTypes/search`
+
+---
+
+## Schedulers — Recurring Entry Generators
+
+Schedulers automate **fixed-amount** recurring transactions. A scheduler generates one entry per period (monthly, quarterly, annually) until its end date.
+
+**Key limitation:** Scheduler amounts are **fixed** — every generated entry has the same amount. This makes schedulers perfect for:
+- Prepaid amortization ($1,000/month for 12 months)
+- Deferred revenue recognition ($2,000/month for 12 months)
+
+But **not suitable** for:
+- Loan interest (changes as principal balance reduces)
+- IFRS 16 liability unwinding (interest component changes each period)
+- Declining balance depreciation (amount changes as book value drops)
+
+**Scheduler + capsule:** When a scheduler has a capsule assigned, every entry it generates is automatically created under that capsule. This is the automation sweet spot for fixed-amount recipes.
+
+**Dynamic strings:** Scheduler descriptions support `{{YEAR}}`, `{{MONTH}}`, `{{MONTH_NAME}}` — e.g., "Insurance amortization — {{MONTH_NAME}} {{YEAR}}" produces "Insurance amortization — January 2025".
+
+**API:** `POST /scheduled/journals` (manual journal scheduler), `POST /scheduled/invoices`, `POST /scheduled/bills`
+
+---
+
+## Manual Journals — Flexible Entries
+
+Manual journals are multi-line debit/credit entries. Use them when amounts change each period or timing is irregular.
+
+**In variable-amount recipes**, you record one journal per period with calculated amounts (from the amortization table or depreciation schedule). Each journal is assigned to the capsule manually.
+
+**Requirements:** Minimum 2 lines, debits must equal credits. Journal descriptions should identify the period (e.g., "Loan payment — Month 3 of 60").
+
+**API:** `POST /journals`
+
+---
+
+## Fixed Assets — Native Straight-Line Depreciation
+
+Jaz has built-in fixed asset management with **straight-line depreciation only**. Register an asset and Jaz auto-posts monthly depreciation journal entries.
+
+**Formula:** `(Cost - Salvage Value) / Useful Life in Months`
+
+**Used in IFRS 16:** The ROU (right-of-use) asset is registered as a native fixed asset. Jaz handles its straight-line depreciation automatically — you only need manual journals for the liability unwinding side.
+
+**Not suitable for:** Declining balance, units of production, sum-of-years-digits, or any non-straight-line method. Use manual journals instead.
+
+**API:** `POST /fixed-assets`
+
+---
+
+## Enrichments — Metadata for Recipes
+
+Apply enrichments to recipe transactions for richer reporting and record-keeping:
+
+| Enrichment | Level | Recipe Use |
+|---|---|---|
+| **Tracking Tags** | Transaction | Tag all entries with scenario label (e.g., "Insurance", "Office Lease") |
+| **Nano Classifiers** | Line item | Classify by department or cost center on each journal line |
+| **Custom Fields** | Transaction | Record reference numbers (policy #, loan #, lease contract #) |
+
+**Schedulers inherit tags and nano classifiers** — set them once on the scheduler and all generated entries get them automatically.
+
+**Custom fields are not available on schedulers** — only on individual transactions.
+
+---
+
+## Accounts Required
+
+Each recipe lists the specific CoA accounts needed. Common patterns:
+
+| Account | Type | Subtype | Used In |
+|---|---|---|---|
+| Prepaid Expenses | Asset | Current Asset | Prepaid amortization |
+| Deferred Revenue | Liability | Current Liability | Deferred revenue |
+| Accrued Expenses | Liability | Current Liability | Accrued expenses |
+| Loan Payable | Liability | Non-Current Liability | Bank loan |
+| Loan Payable (Current) | Liability | Current Liability | Bank loan (current portion) |
+| Interest Expense | Expense | Expense | Bank loan, IFRS 16 |
+| Right-of-Use Asset | Asset | Non-Current Asset | IFRS 16 |
+| Lease Liability | Liability | Non-Current Liability | IFRS 16 |
+| Lease Liability (Current) | Liability | Current Liability | IFRS 16 |
+| Accumulated Depreciation | Asset | Non-Current Asset | Declining balance, Capital WIP |
+| Depreciation Expense | Expense | Expense | Declining balance, Capital WIP |
+| FX Unrealized Gain | Revenue | Other Income | FX revaluation |
+| FX Unrealized Loss | Expense | Other Expense | FX revaluation |
+| Bad Debt Expense | Expense | Expense | ECL provision |
+| Allowance for Doubtful Debts | Asset | Current Asset (contra) | ECL provision |
+| Leave Expense | Expense | Expense | Employee accruals |
+| Accrued Leave Liability | Liability | Current Liability | Employee accruals |
+| Bonus Expense | Expense | Expense | Employee accruals |
+| Accrued Bonus Liability | Liability | Current Liability | Employee accruals |
+| Provision Expense | Expense | Expense | IAS 37 provisions |
+| Provision for Obligations | Liability | Non-Current Liability | IAS 37 provisions |
+| Finance Cost — Unwinding | Expense | Expense | IAS 37 provisions, Lease |
+| Retained Earnings | Equity | Retained Earnings | Dividends |
+| Dividends Payable | Liability | Current Liability | Dividends |
+| Intercompany Receivable | Asset | Current Asset | Intercompany |
+| Intercompany Payable | Liability | Current Liability | Intercompany |
+| Capital Work-in-Progress | Asset | Non-Current Asset | Capital WIP |
+
+**API:** `POST /chart-of-accounts` or `POST /chart-of-accounts/bulk-upsert`

package/assets/skills/transaction-recipes/references/capital-wip.md

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+# Recipe: Capital WIP to Fixed Asset Transfer
+
+## Scenario
+
+Your company is renovating its office at a total estimated cost of $150,000, incurred over 4 months through multiple bills (contractor, materials, permits). During construction, all costs are accumulated in a Capital Work-in-Progress (CIP/CWIP) account. Once the renovation is complete, the total cost is transferred to a Fixed Asset and registered in Jaz's FA module for automatic straight-line depreciation.
+
+**Pattern:** Bills/journals coded to CIP (accumulation phase) + transfer journal + FA registration + capsule
+
+---
+
+## Accounts Involved
+
+| Account | Type | Subtype | Role |
+|---|---|---|---|
+| Capital Work-in-Progress | Asset | Non-Current Asset | Accumulates costs during construction/development |
+| Fixed Asset — [Asset Name] | Asset | Non-Current Asset | Completed asset (after transfer) |
+| Accumulated Depreciation | Asset | Non-Current Asset (contra) | Depreciation reserve (auto by Jaz FA module) |
+| Depreciation Expense | Expense | Expense | Monthly depreciation charge (auto by Jaz FA module) |
+| Cash / Bank Account | Asset | Bank | Pays supplier bills |
+| Accounts Payable | Liability | Current Liability | When bills are recorded |
+
+---
+
+## Journal Entries
+
+### Phase 1: Cost Accumulation (during construction)
+
+Each supplier bill or expense is coded to the CIP account — **not** to expense.
+
+**Supplier bill example:**
+- Create bill: $40,000 to "ABC Contractors"
+- Code to: Capital Work-in-Progress
+- Assign to capsule
+
+**Internal labor capitalization (if applicable):**
+
+| Line | Account | Debit | Credit |
+|---|---|---|---|
+| 1 | Capital Work-in-Progress | *labor cost* | |
+| 2 | Salaries Expense | | *labor cost* |
+
+### Phase 2: Transfer to Fixed Asset (on completion)
+
+When the project is complete, transfer the total accumulated cost from CIP to the fixed asset account:
+
+| Line | Account | Debit | Credit |
+|---|---|---|---|
+| 1 | Fixed Asset — Office Renovation | $150,000 | |
+| 2 | Capital Work-in-Progress | | $150,000 |
+
+### Phase 3: Register Fixed Asset
+
+Register the completed asset in Jaz's Fixed Asset module:
+- Asset name: "Office Renovation — 2025"
+- Cost: $150,000 (must match the transfer amount)
+- Salvage value: $0 (or estimated residual)
+- Useful life: 60 months (5 years for leasehold improvements)
+- Method: Straight-line (Jaz native FA module)
+
+Jaz will then auto-post monthly depreciation:
+- Dr Depreciation Expense $2,500 / Cr Accumulated Depreciation $2,500
+
+---
+
+## Capsule Structure
+
+**Capsule:** "Office Renovation — 2025"
+**Capsule Type:** "Capital Projects"
+
+Contents:
+- Multiple supplier bills (Phase 1)
+- Internal labor journals (if any)
+- 1 transfer journal (Phase 2)
+- **Total entries:** Varies (typically 5-20 depending on project complexity)
+
+> **Note:** The auto-generated depreciation entries from the FA module are separate from the capsule. If you want them tracked, assign the FA to the same capsule tags.
+
+---
+
+## Worked Example
+
+**Project: Office Renovation**
+- Budget: $150,000
+- Duration: Jan 2025 — Apr 2025
+- Useful life after completion: 5 years (60 months)
+- Salvage value: $0
+
+**Jan 15 — Contractor deposit:**
+- Create bill: $40,000 to "ABC Contractors"
+- Code to Capital Work-in-Progress
+- Capsule: "Office Renovation — 2025"
+- Pay bill when due
+
+**Feb 10 — Materials purchase:**
+- Create bill: $35,000 to "BuildMart Supplies"
+- Code to Capital Work-in-Progress
+- Capsule: same
+
+**Mar 5 — Permits and fees:**
+- Create bill: $5,000 to "City Planning Authority"
+- Code to Capital Work-in-Progress
+- Capsule: same
+
+**Mar 28 — Contractor final payment:**
+- Create bill: $60,000 to "ABC Contractors"
+- Code to Capital Work-in-Progress
+- Capsule: same
+
+**Apr 1 — Internal labor capitalized:**
+- Journal: Dr CIP $10,000 / Cr Salaries Expense $10,000
+- Description: "Capitalize internal project management labor — Office Renovation"
+- Capsule: same
+
+**Apr 15 — CIP balance check:**
+- CIP account: $150,000 debit ($40K + $35K + $5K + $60K + $10K)
+
+**Apr 15 — Transfer journal:**
+- Dr Fixed Asset — Office Renovation $150,000
+- Cr Capital Work-in-Progress $150,000
+- Description: "Transfer CIP to Fixed Asset — renovation complete"
+- Capsule: same
+
+**Apr 15 — Register in FA module:**
+- Name: "Office Renovation — 2025"
+- Cost: $150,000
+- Salvage: $0
+- Life: 60 months
+- Start date: April 2025
+
+**May 31 onwards — Auto-depreciation:**
+- $150,000 / 60 months = $2,500/month
+- Jaz auto-posts: Dr Depreciation Expense $2,500 / Cr Accumulated Depreciation $2,500
+
+---
+
+## Enrichment Suggestions
+
+| Enrichment | Value | Why |
+|---|---|---|
+| Tracking Tag | "Capital Project" | Filter all CWIP and transfer entries |
+| Tracking Tag | "Office Renovation" | Project-specific filter |
+| Nano Classifier | Cost Category → "Contractor" / "Materials" / "Permits" | Break down project costs by category |
+| Custom Field | "Project #" → "CAPEX-2025-001" | Internal project reference |
+
+---
+
+## Verification
+
+1. **Trial Balance during accumulation** → Capital Work-in-Progress balance should equal the sum of all bills and journals coded to CIP.
+2. **After transfer** → CIP balance should be $0. Fixed Asset balance should equal the total project cost.
+3. **After FA registration** → Monthly depreciation should start from the completion month. Check first month's entry.
+4. **Group General Ledger by Capsule** → "Office Renovation — 2025" shows all bills + transfer. Complete project audit trail.
+5. **Fixed Asset Register** → Asset appears with correct cost, salvage, life, and monthly depreciation amount.
+
+---
+
+## Variations
+
+**Software development capitalization (IAS 38):** Same pattern but for internal software development. Research phase costs are expensed; development phase costs (once feasibility is established) are capitalized to CIP. Transfer to "Intangible Asset — Software" on go-live.
+
+**Multi-phase project:** If a large project has distinct milestones (e.g., Building A, Building B), you can create sub-capsules per phase or use nano classifiers to tag costs by phase. Transfer each phase to a separate fixed asset when that phase completes.
+
+**Cost overrun:** If actual costs exceed budget, the full actual cost is capitalized. The higher cost simply means higher depreciation per period. No separate treatment needed — CIP captures everything.
+
+**Borrowing costs (IAS 23):** If the project is funded by a specific loan, the interest during construction can be capitalized: Dr CIP / Cr Interest Expense. Stop capitalizing when the asset is ready for use.
+
+**Asset under construction — partial use:** If part of the asset starts being used before the project is complete (e.g., one floor of a building), transfer and register that portion. Continue accumulating costs for the remainder in CIP.