onto-mcp 0.3.0

package/.onto/domains/finance/extension_cases.md

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+---
+version: 2
+last_updated: "2026-04-16"
+source: manual
+status: established
+---
+
+# Finance Domain — Extension Scenarios
+
+Classification axis: **Change trigger** — cases classified by the type of change that triggers structural evolution of the financial ontology. Cases cover both growth triggers (Cases 1–8) and shrinkage/migration triggers (Cases 9–10).
+
+---
+
+## Case 1: Adding a New Company
+
+### Situation
+Adding a previously absent company's financial statements to the ontology.
+
+### Case Study: Adding a Financial Industry Entity (Banking)
+A general-industry ontology expanded to include a major bank. The bank's IS started with Net Interest Income (not Revenue → Gross Profit), regulatory capital disclosures (CET1, Tier 1) were required beyond standard 5-statement completeness, and >40% of accounts were company-specific extensions requiring normalization.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| Entity node creation | New Entity with industry classification and listing status |
+| Statement structure | Financial industry may require additional statements |
+| Extension accounts | Normalization mapping for company-specific accounts |
+| Referential integrity | RI01 (concept exists), RI05 (entity recognized) |
+
+### Verification Checklist
+- [ ] Entity node created with correct industry classification? → structure_spec.md §Required Node Types
+- [ ] All required statements created for entity-period? → structure_spec.md §Financial Statement Completeness
+- [ ] Extension accounts mapped to canonical names? → concepts.md §Extension Account Handling
+- [ ] Referential integrity verified? → dependency_rules.md §Referential Integrity
+
+### Affected Files
+| File | Impact | Section |
+|---|---|---|
+| structure_spec.md | Verify | §Financial Statement Completeness (industry branching) |
+| concepts.md | Modify | §Extension Account Handling (new mappings) |
+| dependency_rules.md | Verify | §Referential Integrity |
+
+---
+
+## Case 2: Adding Quarterly Reports
+
+### Situation
+Adding quarterly reports for a company that previously had only annual reports.
+
+### Case Study: First Quarterly Data Ingestion
+An entity's annual report was structured (XBRL). Quarterly reports were available only as HTML filings. Challenges: cumulative YTD vs single-quarter distinction, reviewed (not audited) status requiring confidence metadata, and quarterly extension accounts not matching annual taxonomy.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| Period nodes | Quarterly Period nodes with distinct start/end dates |
+| Period rules | PR03 enforcement (quarterly vs annual comparison prevented) |
+| Cumulative vs single-quarter | PR04 metadata to distinguish YTD from single-quarter |
+| Assurance level | Quarterly = reviewed (not audited); lower confidence |
+| Source quality | Quarterly may come from different source format |
+
+### Verification Checklist
+- [ ] Quarterly Period nodes created with correct dates? → structure_spec.md §Required Node Types → Period
+- [ ] PR03 prevents quarterly-annual direct comparison? → logic_rules.md §Period Rules
+- [ ] Cumulative vs single-quarter distinguished? → logic_rules.md §Period Rules → PR04
+- [ ] Assurance level (reviewed) captured? → structure_spec.md §Required Node Types → AuditInfo
+- [ ] Source type metadata captured for quarterly data? → dependency_rules.md §Source Quality Metadata
+
+### Affected Files
+| File | Impact | Section |
+|---|---|---|
+| structure_spec.md | Verify | §Required Node Types (Period, AuditInfo) |
+| logic_rules.md | Verify | §Period Rules (PR03, PR04) |
+| dependency_rules.md | Verify | §Source of Truth Transition Rules |
+
+---
+
+## Case 3: IFRS Taxonomy Version Update
+
+### Situation
+The IFRS Foundation releases an annual taxonomy update — elements added, renamed, deprecated, or restructured.
+
+### Case Study: IFRS Taxonomy 2023 → 2024 Update
+Taxonomy update introduced new elements for IFRS 17 (Insurance Contracts) and refined IFRS 9 disclosure elements. 15 elements deprecated, 23 added, 8 renamed. Historical FinancialFacts referencing deprecated elements needed migration to new element IDs while preserving query continuity.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| Concept hierarchy | Additions, deletions, renames in Concept nodes |
+| Referential integrity | RI01 re-verification for all HAS_CONCEPT edges |
+| Synonym mappings | concepts.md update for renamed elements |
+| Historical data | Cross-version correspondence table for deprecated → new mapping |
+| Version tracking | Taxonomy version per entity-period must be tracked |
+
+### Verification Checklist
+- [ ] Changed Concept nodes identified? → concepts.md §Core Synonym Mappings
+- [ ] RI01 re-verified? → dependency_rules.md §Referential Integrity
+- [ ] Synonym mappings updated? → concepts.md §Extension Account Handling
+- [ ] Historical data migrated or cross-version table maintained? → structure_spec.md §Version Management
+- [ ] Taxonomy version tracked per entity-period? → dependency_rules.md §Taxonomy/Instance Separation
+
+### Affected Files
+| File | Impact | Section |
+|---|---|---|
+| concepts.md | Modify | §Core Synonym Mappings, §Extension Account Handling |
+| dependency_rules.md | Verify | §Referential Integrity, §Taxonomy/Instance Separation |
+| structure_spec.md | Verify | §Semantic Identifier Preservation, §Version Management |
+
+---
+
+## Case 4: Non-Financial Data Integration (ESG)
+
+### Situation
+Adding ESG (Environmental, Social, Governance) metrics, workforce statistics, and sustainability disclosures alongside financial data.
+
+### Case Study: ISSB S1/S2 Integration
+ISSB released sustainability disclosure standards (IFRS S1 General, IFRS S2 Climate) aligned with IFRS financial reporting. Non-financial facts (carbon emissions, workforce diversity, board composition) required new Concept types, different temporal granularity (some metrics are annual-only), and different source dependencies (sustainability reports, CDP filings).
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| New node types | NonFinancialFact or extended FinancialFact with category tag |
+| Relationship reuse | REPORTED_BY, IN_PERIOD reusable; HAS_CONCEPT requires extended taxonomy |
+| Accounting identity impact | EQ01-EQ03 do not apply to non-financial data — separate rule set needed |
+| Source dependencies | Non-financial data rarely from XBRL; typically semi-structured/unstructured |
+| Comparability | Non-financial metrics have less standardized definitions than financial |
+
+### Verification Checklist
+- [ ] New node type or category tag defined? → structure_spec.md §Required Node Types
+- [ ] Existing relationships reused where possible? → structure_spec.md §Required Relationships
+- [ ] Existing accounting identities not impacted? → logic_rules.md §Accounting Identities
+- [ ] Separate logic rules for non-financial data defined? → logic_rules.md
+- [ ] Source quality tracked for non-financial data? → dependency_rules.md §Source Quality Metadata
+
+### Affected Files
+| File | Impact | Section |
+|---|---|---|
+| structure_spec.md | Modify | §Required Node Types (new type or extension) |
+| logic_rules.md | Modify | §new section for non-financial rules |
+| dependency_rules.md | Verify | §Source of Truth Transition Rules |
+
+---
+
+## Case 5: Multi-Country Expansion
+
+### Situation
+Expanding from single-country financial data to multi-country coverage with different accounting standards (IFRS, US-GAAP, J-GAAP).
+
+### Case Study: IFRS ↔ US-GAAP Cross-Mapping
+Expanding from Korea (K-IFRS) to US (US-GAAP) entities. Key differences: goodwill amortisation (US-GAAP 2024 option vs IFRS impairment-only), LIFO allowed (US-GAAP) vs prohibited (IFRS), lease classification (US-GAAP retains operating/finance for lessees; IFRS does not). The EQUIVALENT_TO relationship between IFRS and US-GAAP taxonomy elements required mapping ~2,000 elements with ~300 partial correspondences.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| Entity codes | Cross-country entity code unification (stock codes, LEI) |
+| Taxonomy mapping | IFRS ↔ US-GAAP ↔ Local GAAP cross-mapping (~2,000 elements) |
+| Currency | Multi-currency dimension added to FinancialFact |
+| Reporting frequency | Different disclosure frequencies and fiscal year-ends |
+| Accounting standard differences | LIFO, goodwill, lease classification differences must be flagged |
+
+### Verification Checklist
+- [ ] Entity code system unified across countries? → structure_spec.md §ID System
+- [ ] Cross-standard taxonomy mapping defined? → concepts.md §External Standard Mappings
+- [ ] Currency dimension added? → structure_spec.md §Required Node Types → FinancialFact attributes
+- [ ] Accounting standard differences flagged during comparison? → concepts.md §Interpretation Principles → #3
+- [ ] Period rules accommodate non-December fiscal year-ends? → logic_rules.md §Period Rules → PR05
+
+### Affected Files
+| File | Impact | Section |
+|---|---|---|
+| concepts.md | Modify | §External Standard Mappings (cross-standard) |
+| structure_spec.md | Modify | §ID System (multi-country), §Required Node Types (currency) |
+| logic_rules.md | Verify | §Period Rules (PR05, PR03 with different standards) |
+
+---
+
+## Case 6: Restatement Processing
+
+### Situation
+A previously filed report is superseded by a restated filing.
+
+### Case Study: Material Restatement Due to Revenue Recognition Error
+A company restated 3 years of revenue after discovering premature recognition (recognizing revenue before performance obligations were satisfied under IFRS 15). The restatement created multiple FinancialFact versions for the same entity-period-concept combination. Prior period BS figures also changed due to cumulative effect adjustment.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| Version management | Multiple instances for same entity-period-concept |
+| Final version determination | Filing ID + date determines authoritative version |
+| Historical comparison | Previous versions preserved for trend analysis |
+| Cross-statement impact | IS restatement cascades to BS (retained earnings) and equity changes |
+| Partial restatement | Only changed items updated; unchanged items retained from original |
+
+### Verification Checklist
+- [ ] Restatement detected (multiple versions for same combination)? → structure_spec.md §Version Management
+- [ ] Final version determinable by filing metadata? → structure_spec.md §Version Management
+- [ ] Previous versions deactivated but preserved? → structure_spec.md §Version Management
+- [ ] Cross-statement impact verified? → logic_rules.md §Cross-Statement Linkage Rules
+- [ ] Referential integrity maintained for final version? → dependency_rules.md §Referential Integrity
+
+### Affected Files
+| File | Impact | Section |
+|---|---|---|
+| structure_spec.md | Verify | §Version Management, §ID System |
+| logic_rules.md | Verify | §Cross-Statement Linkage Rules (XL04) |
+| dependency_rules.md | Verify | §Referential Integrity |
+
+---
+
+## Case 7: New Accounting Standard Adoption
+
+### Situation
+A new or significantly amended IFRS standard takes effect, changing recognition, measurement, or disclosure requirements.
+
+### Case Study: IFRS 16 Leases Adoption (2019)
+Operating leases moved from off-balance-sheet to on-balance-sheet. Right-of-use assets and lease liabilities appeared on BS for the first time. Companies chose between full retrospective and modified retrospective transition methods. Impact: total assets and total liabilities increased by 10-30% for asset-heavy companies (airlines, retail). Existing ratios (debt-to-equity, ROA) were fundamentally altered.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| New concepts | Right-of-use asset, lease liability taxonomy elements added |
+| BS impact | Total assets and liabilities increase materially |
+| Ratio impact | Leverage ratios, ROA, interest coverage all affected |
+| Transition method | Full retrospective vs modified retrospective → different comparability |
+| Historical comparison | Pre-adoption and post-adoption figures not directly comparable |
+
+### Verification Checklist
+- [ ] New taxonomy elements added to Concept hierarchy? → concepts.md §IFRS 16 Lease Terms
+- [ ] Accounting identities still hold with new elements? → logic_rules.md §Accounting Identities
+- [ ] Derived metric formulas updated or caveated? → logic_rules.md §Derived Metric Calculation Rules
+- [ ] Transition method documented for comparability? → concepts.md §Accounting Policy Differences
+- [ ] Historical comparison flagged for standard adoption impact? → concepts.md §Interpretation Principles
+
+### Affected Files
+| File | Impact | Section |
+|---|---|---|
+| concepts.md | Modify | §relevant IFRS section, §Accounting Policy Differences |
+| logic_rules.md | Modify | §relevant rules, §Derived Metric Calculation Rules |
+| structure_spec.md | Verify | §Required Node Types (Concept) |
+
+---
+
+## Case 8: Source Format Migration (PDF → XBRL)
+
+### Situation
+A previously PDF-only filing jurisdiction mandates XBRL filing, or a company that was available only via HTML now files in XBRL.
+
+### Case Study: EU ESEF Mandate (2020)
+EU mandated XBRL tagging (European Single Electronic Format) for IFRS annual reports. Previously HTML-only filings became XBRL-tagged. Challenges: initial XBRL filings had high error rates, extension accounts were tagged inconsistently, and block-tagged notes (entire note sections tagged as one element rather than granular tagging) limited data extraction.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| Source quality upgrade | PDF/HTML (Priority 2/3) → XBRL (Priority 1) |
+| ID system | Temporary IDs from PDF can be replaced by XBRL element IDs |
+| Referential integrity | RI03 temporary IDs promoted to canonical |
+| Data completeness | XBRL may tag more items than what was extractable from PDF |
+| Validation | XBRL filing validation rules catch errors not detected in PDF |
+
+### Verification Checklist
+- [ ] Source priority metadata updated? → dependency_rules.md §Source of Truth Transition Rules
+- [ ] Temporary IDs promoted to canonical XBRL IDs? → dependency_rules.md §Referential Integrity → RI03
+- [ ] Historical PDF data preserved for comparison? → structure_spec.md §Version Management
+- [ ] XBRL validation errors handled? → logic_rules.md §Accounting Identities
+
+### Affected Files
+| File | Impact | Section |
+|---|---|---|
+| dependency_rules.md | Modify | §Source of Truth Transition Rules, §Referential Integrity |
+| structure_spec.md | Verify | §ID System (canonical promotion) |
+
+---
+
+## Case 9: Entity Delisting or Dissolution
+
+### Situation (Shrinkage)
+A company delists from a stock exchange or dissolves. Historical data must be preserved but entity status updated.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| Entity status | Listing status → delisted, with effective date |
+| Historical preservation | All historical facts preserved with immutable period attribution |
+| Going concern | Final filing may have going concern emphasis |
+| Segment changes | Segments may be dissolved or transferred to acquirer |
+| Comparison impact | Peer comparison sets must exclude delisted entity from current period |
+
+### Verification Checklist
+- [ ] Entity status updated with delisting/dissolution date? → structure_spec.md §Required Node Types
+- [ ] Historical data preserved and queryable? → structure_spec.md §Version Management
+- [ ] Peer comparison exclusion implemented? → competency_qs.md CQ-IE
+- [ ] Going concern audit emphasis captured? → structure_spec.md §Required Node Types → AuditInfo
+
+---
+
+## Case 10: Taxonomy Element Deprecation
+
+### Situation (Shrinkage)
+A taxonomy element is deprecated in a new IFRS Taxonomy version. All references must be migrated.
+
+### Impact Analysis
+
+| Principle | Impact |
+|---|---|
+| Concept node | Mark as deprecated with sunset date |
+| Migration mapping | Deprecated element → replacement element mapping |
+| Historical data | Old references preserved for historical queries; new queries use replacement |
+| Cross-version queries | Queries spanning pre/post-deprecation must use mapping table |
+
+### Verification Checklist
+- [ ] Deprecated concept marked with metadata? → structure_spec.md §Semantic Identifier Preservation
+- [ ] Migration mapping defined? → concepts.md §Extension Account Handling
+- [ ] Historical queries still functional? → competency_qs.md CQ-TS
+- [ ] New filings use replacement element? → dependency_rules.md §Referential Integrity
+
+---
+
+## Scenario Interconnections
+
+| Scenario | Triggers / Interacts With | Reason |
+|---|---|---|
+| Case 1 (New Company) | → Case 3 (Taxonomy) | New company may use newer taxonomy version |
+| Case 2 (Quarterly) | → Case 8 (Source Migration) | Quarterly data may come from different source format |
+| Case 3 (Taxonomy Update) | → Case 10 (Deprecation) | Taxonomy updates include element deprecations |
+| Case 4 (ESG) | → Case 7 (New Standard) | ESG standards (ISSB S1/S2) are new accounting standards |
+| Case 5 (Multi-Country) | → Case 3 (Taxonomy) | Different countries use different taxonomy versions |
+| Case 6 (Restatement) | → Case 2 (Quarterly) | Restatements may affect both quarterly and annual data |
+| Case 7 (New Standard) | → Case 3 (Taxonomy) | New standards produce new taxonomy elements |
+| Case 8 (Source Migration) | → Case 1 (New Company) | Newly XBRL-filed companies become data-accessible |
+| Case 9 (Delisting) | → Case 6 (Restatement) | Final filings may include retrospective adjustments |
+| Case 10 (Deprecation) | → Case 5 (Multi-Country) | Deprecation affects cross-country mapping tables |
+
+---
+
+## Related Documents
+- domain_scope.md — Classification axes affected by extension scenarios
+- concepts.md — Mapping update targets for new companies and taxonomy changes
+- structure_spec.md — Structural basis for adding new node types and relationships
+- dependency_rules.md — Source transition and referential integrity rules
+- logic_rules.md — Identity impact verification for new data types
+- competency_qs.md — Advanced questions addressed by extension scenarios

package/.onto/domains/finance/logic_rules.md

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+---
+version: 2
+last_updated: "2026-04-16"
+source: manual
+status: established
+---
+
+# Finance Domain — Logic Rules
+
+Classification axis: **Rule type** — rules classified by the nature of the financial constraint they enforce.
+
+## Accounting Identities
+
+Fundamental mathematical constraints that must hold. Violation indicates data error, not a business exception.
+
+| ID | Identity | Violation Severity | Verification Timing | Tolerance |
+|---|---|---|---|---|
+| EQ01 | Assets = Liabilities + Equity | Error (block) | At input | ±1 unit (rounding) |
+| EQ02 | Opening equity + Net income + OCI ± Capital transactions = Closing equity | Warning | At query | ±1% of equity (notes may be incomplete) |
+| EQ03 | Opening cash + Operating CF + Investing CF + Financing CF = Closing cash | Error (block) | At input | ±1 unit (rounding) |
+| EQ04 | Comprehensive income = Net income + Other comprehensive income | Error (block) | At input | ±1 unit |
+| EQ05 | Total assets = Current assets + Non-current assets | Error (block) | At input | ±1 unit |
+| EQ06 | Total liabilities = Current liabilities + Non-current liabilities | Error (block) | At input | ±1 unit |
+
+> **EQ02 Warning rationale:** Not all items from the Statement of Changes in Equity may be available as structured data (treasury stock transactions, stock-based compensation, dividends). Note information may be needed for complete verification. A warning allows data to be stored while flagging the gap for investigation.
+
+### Identity Verification Priority
+
+When multiple identities can be verified, prioritize by impact:
+1. **EQ01** (BS equation) — most fundamental; failure indicates systemic data error
+2. **EQ03** (CF reconciliation) — second most critical; failure often indicates missing CF items
+3. **EQ05, EQ06** (subtotal consistency) — structural consistency within BS
+4. **EQ04** (OCI linkage) — important but OCI items are sometimes presented differently
+5. **EQ02** (equity reconciliation) — lowest priority due to data availability constraints
+
+## Cross-Statement Linkage Rules
+
+These rules verify consistency between different financial statements.
+
+| ID | Rule | From Statement | To Statement | Severity |
+|---|---|---|---|---|
+| XL01 | Net income in IS = Net income in Statement of Changes in Equity | IS | Equity Changes | Error |
+| XL02 | Closing cash in CF = Cash and cash equivalents in BS | CF | BS | Error |
+| XL03 | OCI items in Comprehensive Income = OCI items in Statement of Changes in Equity | OCI | Equity Changes | Warning |
+| XL04 | Opening balances in current period BS = Closing balances in prior period BS | BS(t) | BS(t-1) | Warning |
+
+> **XL04 Warning:** Restated prior-period figures may differ from the originally reported prior period. Verification requires restatement-aware comparison — match against the restated version, not the original filing.
+
+## Relation Rules
+
+Arithmetic relationships within financial statements.
+
+| ID | Rule | Description | Severity | Industry |
+|---|---|---|---|---|
+| RE01 | Gross profit = Revenue - Cost of goods sold | IS arithmetic | Error | General |
+| RE02 | Operating income = Gross profit - SG&A | Varies by industry — see note | Warning | General |
+| RE03 | Current ratio = Current assets / Current liabilities | Derived metric formula | — (calculation) | All |
+| RE04 | Quick ratio = (Current assets - Inventory) / Current liabilities | Derived metric formula | — (calculation) | All |
+| RE05 | Interest coverage = EBIT / Interest expense | Derived metric formula | — (calculation) | All |
+| RE06 | Working capital = Current assets - Current liabilities | Derived metric formula | — (calculation) | All |
+
+> **RE02 industry branching:** Financial industry has a different operating income structure. Instead of "gross profit - SG&A," it starts from net interest income, fee income, and insurance premium income. The general industry formula does not apply. Rule selection branches on the industry classification axis (general/financial).
+
+### Financial Industry Specific Rules
+
+| ID | Rule | Description | Severity |
+|---|---|---|---|
+| FI-RE01 | Net interest income = Interest income - Interest expense | Bank P&L starting point | Error |
+| FI-RE02 | Pre-provision income = Net interest income + Non-interest income - Non-interest expense | Bank operating metric | Warning |
+| FI-RE03 | CET1 ratio = Common Equity Tier 1 / Risk-weighted assets | Basel III regulatory ratio | — (calculation) |
+
+## Period Rules
+
+Temporal attribution and comparison constraints.
+
+| ID | Rule | Description | Verification Timing | Severity |
+|---|---|---|---|---|
+| PR01 | Instant items are attributed to a specific date | BS items (assets, liabilities, equity) | At input | Error |
+| PR02 | Duration items are attributed to a start-date-to-end-date interval | IS and CF items | At input | Error |
+| PR03 | Period comparison of the same item requires matching durations | Prevents quarterly vs annual comparison | At query | Error |
+| PR04 | Cumulative YTD figures must be distinguishable from single-quarter figures | Q3 cumulative (Jan-Sep) ≠ Q3 single (Jul-Sep) | At input | Warning |
+| PR05 | Fiscal year end date must be captured — not all entities use December 31 | April-end (Japan), March-end (Korea gov), June-end (retail) | At input | Warning |
+
+> **PR03 enforcement:** Even for the same company, quarterly revenue (3-month) and annual revenue (12-month) are not directly comparable. The ontology must prevent queries that compare items across different durations without explicit normalization (e.g., annualization).
+
+### Period Identification
+
+- Period identification uses the combination: `{EntityCode}_{StartDate}_{EndDate}_{ReportingUnit}_{Source}`
+- Same entity, same dates, but different sources (XBRL vs PDF) produce different Facts — source provenance is part of the identifier
+- Restated filings for the same period produce additional version-tagged instances
+
+## Classification Rules
+
+| ID | Rule | Description | Severity |
+|---|---|---|---|
+| CL01 | BS items with recovery/settlement ≤12 months are current | IAS 1.66 current asset criteria | Warning |
+| CL02 | Liabilities with no unconditional right to defer beyond 12 months are current | IAS 1.69 current liability criteria | Warning |
+| CL03 | Reclassification of current portion of long-term debt | Long-term borrowings due ≤12 months → current | Warning |
+| CL04 | Financial assets classified by business model + SPPI test | IFRS 9 classification: amortised cost / FVOCI / FVPL | Warning |
+
+> **CL01-CL03 Warning:** Classification often requires judgment and note disclosures. Automated verification may flag items that are correctly classified based on judgment not visible in structured data.
+
+## Revenue Recognition Rules (IFRS 15)
+
+| ID | Rule | Description | Verification Timing | Severity |
+|---|---|---|---|---|
+| RR01 | Revenue is recognized at the point of or over the period of performance obligation fulfillment | Point-in-time vs over-time | At input | Warning |
+| RR02 | Variable consideration is estimated and included in the transaction price | Returns, rebates, performance bonuses | At query | Warning |
+| RR03 | Contract assets arise when performance precedes payment | Right to consideration not yet unconditional | At input | Warning |
+| RR04 | Contract liabilities arise when payment precedes performance | Obligation to transfer goods/services | At input | Warning |
+| RR05 | Multi-element arrangements allocate transaction price to performance obligations | Standalone selling price basis | At query | Warning |
+
+> **IFRS 15 Warning rationale:** Revenue recognition requires significant judgment (identification of performance obligations, estimation of variable consideration). Automated verification can flag patterns but cannot replace judgment — hence Warning severity.
+
+## Financial Instrument Classification Rules (IFRS 9)
+
+| ID | Rule | Description | Verification Timing | Severity |
+|---|---|---|---|---|
+| FI01 | Financial assets classified by business model + cash flow test | Amortised cost / FVOCI / FVPL | At input | Warning |
+| FI02 | ECL measured as 12-month (Stage 1) or lifetime (Stage 2/3) | Significant increase in credit risk triggers Stage 2 | At query | Warning |
+| FI03 | Hedge relationships require documentation and effectiveness testing | Hedging instrument ↔ hedged item linkage | At query | Warning |
+
+## Lease Rules (IFRS 16)
+
+| ID | Rule | Description | Verification Timing | Severity |
+|---|---|---|---|---|
+| LS01 | Lessee recognizes right-of-use asset and lease liability at commencement | Except short-term (≤12 months) and low-value exemptions | At input | Warning |
+| LS02 | ROU asset depreciated over shorter of lease term and useful life | Straight-line unless another method more appropriate | At query | Warning |
+| LS03 | Lease liability = PV of remaining lease payments | Discounted at implicit rate or incremental borrowing rate | At input | Warning |
+
+## Constraint Conflict Checking
+
+| ID | Rule | Description | Severity |
+|---|---|---|---|
+| CF01 | Consolidated total assets ≥ Separate total assets | General expectation due to subsidiary inclusion | Warning |
+| CF02 | Audit opinion ≠ "Qualified" or "Adverse" for reliable comparison | Qualified opinions indicate material misstatement or scope limitation | Warning |
+| CF03 | Segment revenue sum + intercompany eliminations + unallocated ≈ Consolidated revenue | Segment reconciliation | Warning |
+| CF04 | Non-GAAP metrics must be accompanied by GAAP reconciliation | SEC requirement; ESMA guidelines | Warning |
+
+> **CF01 exceptions:** Intercompany elimination, different consolidation dates, and foreign currency effects can cause consolidated < separate in specific line items. The constraint is a heuristic, not an identity — violations trigger investigation, not rejection.
+
+### Constraint Conflict Resolution
+
+When rules conflict:
+1. **Accounting identities (EQ01-EQ06)** always take precedence — they are mathematical facts
+2. **Cross-statement linkages (XL01-XL04)** take precedence over classification rules — consistency across statements is more important than individual classification
+3. **Period rules (PR01-PR05)** take precedence over comparison queries — temporal validity must hold before comparison is meaningful
+4. **Classification rules** are subordinate to identities and linkages — classification involves judgment and may be overridden by auditor determination
+
+## Derived Metric Calculation Rules
+
+| Metric | Formula | Required Items | Temporal Caution | Tier |
+|---|---|---|---|---|
+| ROE | Net income / Average equity | ProfitLoss (duration), Equity (instant) | Average = (opening + closing) / 2 | T3 |
+| ROA | Net income / Average total assets | ProfitLoss (duration), Assets (instant) | Average = (opening + closing) / 2 | T3 |
+| Debt-to-equity | Total liabilities / Total equity | Liabilities (instant), Equity (instant) | Same point-in-time required | T3 |
+| Current ratio | Current assets / Current liabilities | CurrentAssets (instant), CurrentLiabilities (instant) | Same point-in-time required | T3 |
+| Quick ratio | (Current assets - Inventory) / Current liabilities | CurrentAssets, Inventory, CurrentLiabilities (all instant) | Same point-in-time required | T3 |
+| Interest coverage | EBIT / Interest expense | OperatingIncome + Interest (duration), Interest (duration) | Same period required | T3 |
+| EPS | Net income / Weighted avg shares | ProfitLoss (duration), Shares (from notes) | Weighted average, not period-end count | T1a |
+| Operating margin | Operating income / Revenue | Both duration | Same period required | T3 |
+| EBITDA | Operating income + D&A | Or: Net income + Interest + Tax + D&A | Both duration; definition must be documented | T3 |
+| Free cash flow | Operating CF - CapEx | Both duration | CapEx = purchase of PP&E from investing CF | T3 |
+| Net debt | Total borrowings - Cash and equivalents | Borrowings (instant), Cash (instant) | Same point-in-time required | T3 |
+| P/E ratio | Market price / EPS | Price (market data), EPS (computed) | Price is point-in-time; EPS is trailing 12 months | T3 |
+| P/B ratio | Market cap / Book value of equity | Price × shares, Equity (instant) | Same point-in-time for equity; price is market | T3 |
+
+### Metric Computation Cautions
+
+- **Averaging rule:** When a duration metric (net income) is divided by an instant metric (equity), the instant metric must be averaged (opening + closing) / 2 to match the period. Using only the closing value biases the ratio
+- **Non-GAAP consistency:** EBITDA, free cash flow, and adjusted metrics are not standardized. When comparing across entities, the definition must be verified — "adjusted EBITDA" may exclude different items at each company
+- **Financial industry:** Standard profitability ratios (operating margin, gross margin) are not meaningful for banks and insurance companies. Use NIM, ROE, CET1 ratio, combined ratio (insurance) instead
+
+## SE Transfer Verification
+
+| SE Pattern | Finance Equivalent | Key Difference |
+|---|---|---|
+| Type system enforcement (compile-time) | Accounting identity verification (at-input) | SE uses compiler; finance uses data validation pipeline |
+| State machine determinism | Period/temporal state correctness | SE verifies via tests; finance verifies via period rule enforcement |
+| Database constraints (NOT NULL, FK) | Referential integrity (RI01-RI03) | SE uses DB enforcement; finance uses ontology validation |
+| API versioning | Taxonomy versioning (IFRS Taxonomy annual updates) | SE versions endpoints; finance versions concept hierarchies |
+| Test coverage | Competency question coverage (CQ matrix) | SE measures line coverage; finance measures question answerability |
+
+## Related Documents
+
+- domain_scope.md — Normative tier classification, sub-area definitions
+- concepts.md — Account classification principles, synonym mappings, IFRS term definitions
+- structure_spec.md — Node types and relationships where identities and rules are enforced
+- dependency_rules.md — Direction rules, referential integrity, source dependencies
+- competency_qs.md — Questions where logic rules provide inference paths
+- conciseness_rules.md — Redundancy rules informed by identity-based equivalence