{
  "tool_id": "art-635-rate-rec-5pct-threshold-classifier",
  "tool_version": "1.0.0",
  "display_name": "Rate Reconciliation 5% Threshold Classifier",
  "mcp_name": "classify_rate_rec_5pct_threshold",
  "mandate_type": "compliance_mandate",
  "wave": 99,
  "gpu": false,
  "url": "https://ainumbers.co/chaingraph/art-635-rate-rec-5pct-threshold-classifier.html",
  "description": "Applies the quantitative 5 percent threshold of ASC 740-10-50-12A(b), as amended by FASB Accounting Standards Update No. 2023-09, to one candidate rate reconciliation item. Takes the signed effect of the item, continuing operations pretax income, the applicable statutory federal or national rate of the domicile jurisdiction, the reconciling item category and whether the filer is a public business entity; returns the item as a percentage of the threshold base, a crossing flag, the separate disclosure consequence, and the disaggregation 740-10-50-12A(b) requires of that category. The comparison is taken in absolute amount on BOTH sides, which is stated at BC35 of the Update and corroborated by 740-10-50-12A(b)(2) requiring separate disclosure where an item's gross amount, positive or negative, meets the threshold. That is what makes the test well defined for a loss making entity, so a negative pretax income is ordinary here rather than degenerate. The category enum has nine members, not eight: 740-10-50-12A(a) closes a list of eight, and 740-10-50-12A(b)(3) separately addresses an item within none of them, which an eight member enum could not express. The arithmetic fact and the legal consequence are separate fields because 740-10-50-12A applies to a public business entity while 740-10-50-13 gives other entities a qualitative requirement and no numerical reconciliation. rounding_steps is none before comparison: every verdict is decided by exact cross multiplication on unrounded inputs, never by rounding a percentage and then comparing, and the reported percentage is computed after the verdict and never feeds it. A zero threshold base is reported as not assessable with a named caveat rather than divided silently, because BC38 records that the Board considered and declined to give guidance for the break even and no or minimal rate cases; for the same reason this node draws no numeric break even band. Zero network calls: it does not compute the rate reconciliation, does not determine the statutory rate, does not decide an item's category, does not choose the level of aggregation at which the threshold is applied, and does not apply the separate income taxes paid test of ASC 740-10-50-23.",
  "input_schema_ref": "chaingraph/art-635-rate-rec-5pct-threshold-classifier.html#manifest",
  "consumes": [],
  "feeds": [],
  "status": "live",
  "conformance_fixtures": true,
  "compute_capability": "server",
  "compute_images": [
    {
      "system": "sha256-source",
      "image_id": "sha256:d64faa0765db8024c6f6057f6f2e5ae0c86940532c5207fd7dabd0b07488b14c",
      "valid_from": "2026-08-15"
    },
    {
      "system": "risc0",
      "image_id": "sha256:a1a0bc89b5b1febaeda3519f6dbade0fa5ac16beeb143c4e1b01689573567bc6",
      "valid_from": "2026-08-16"
    }
  ],
  "export_capability": [
    "json"
  ],
  "standards_basis": "implements_standard",
  "cited_clause_digest": [
    {
      "digest": "sha256:f16b411d4a4c70df77a2c3181a81da7a0b24681845d5f15b29e88536afd1c123",
      "source_url": "https://storage.fasb.org/ASU%202023-09.pdf",
      "retrieved_at": "2026-08-15",
      "clause_path": "ASC 740-10-50-12 through 50-13; BC35-BC40",
      "scheme": "fasb-asu",
      "id": "ASU 2023-09"
    }
  ],
  "compute_proof_ready": "ready",
  "compute_proof": {
    "type": "ZkVmReceipt",
    "system": "risc0",
    "receiptFormat": "groth16-bn254",
    "imageId": "sha256:a1a0bc89b5b1febaeda3519f6dbade0fa5ac16beeb143c4e1b01689573567bc6",
    "seal": "AbWRhN85m+NXZnqsCI2uXRyESY/ZOhOmM7wA+IyyJScGe6KK++4d6c6xfs9IzXjHQdfo7durWIVzQIiwsUNHlgMpn++6KsQCzhg8w2K21tibKlsiqYJvNwbJsKwziQVfBFikqhZNj4cFuX6G1GwCwD+RCFItPLKgVVphTi7a06sOrox1d4D9fGmH/kEzpC0rN1zY5MZfGaahrXri42tgVitn6RRRLrrCGGDEkbsnNNtCCxHDccCLfkka2IgPQwt1FYDusivH4JTP7e5Y1XfXFfFxuzRyYVJTM9KpEGtQdIAhB6GX/a9SwtOtmyJPkEkcHyZGz5kcCWV9lkROnesSTA==",
    "journal": {
      "chaingraph_version": "0.4.0",
      "kernel_digest": "sha256:d64faa0765db8024c6f6057f6f2e5ae0c86940532c5207fd7dabd0b07488b14c",
      "output": {
        "basis": "No threshold verdict is returned. Zero threshold base: pretax_income or statutory_rate_pct is zero, or their product underflowed to zero. ASC 740-10-50-12C separately requires the entity to explain individual reconciling items and the judgment used in categorising them.",
        "break_even_judgment_note": "ASU 2023-09 BC38 records that the Board considered and declined to provide guidance on applying the 5 percent threshold where an entity operates at or around break even or is domiciled in a jurisdiction with no or minimal statutory income tax rates, and expects the entity to apply judgment. This node draws no numeric break even band for that reason.",
        "category_recognized": true,
        "citation": "ASC 740-10-50-12A(a) and (b); ASU 2023-09 BC35 and BC38",
        "crosses_5pct_threshold": null,
        "denominator_near_zero_caveat": "The threshold base is zero, so every amount clears it trivially and a verdict would be an artefact of the degenerate denominator rather than a reading of ASC 740-10-50-12A(b). Reported as not assessable under ASU 2023-09 BC38 rather than divided silently.",
        "disaggregation_citation": "ASC 740-10-50-12A(b); ASC 740-10-50-12B",
        "entity_is_public_business_entity": true,
        "management_judgment_required": true,
        "must_disclose_separately": null,
        "not_assessable_reason": "Zero threshold base: pretax_income or statutory_rate_pct is zero, or their product underflowed to zero.",
        "pct_of_threshold_base": null,
        "pretax_income": 1000,
        "reconciling_item_amount": 50,
        "reconciling_item_category": "state_and_local_income_tax_net_of_federal",
        "required_disaggregation": null,
        "statutory_rate_pct": 0,
        "threshold_amount": 0,
        "threshold_base_amount": 0
      }
    }
  }
}