Cashflow Fieldnotes
Method & limits / Cashflow Fieldnotes

Precision, cash scope and the meaning of a tolerance

Why an exact calculation can still be the wrong reconciliation, and what to check next.

Precision and source accuracy are different questions

Cashflow Bridge Check parses amount strings with Python Decimal. It sizes the arithmetic context to accommodate the supplied integral and fractional places. This matters for amounts longer than the default 28-digit context, and for familiar inputs such as 0.1 and 0.2. It cannot recover decimals already rounded away in a published statement.

A tolerance has a unit

The default absolute tolerance is 0.01 in your input unit. For USD millions, that is USD 10,000, not one cent. In a statement rounded to whole millions, this default may be unnecessarily tight; it is not a universal materiality threshold. Choose and record your own tolerance from the report's presentation precision.

python cashflow_bridge.py examples/reconciled.json --tolerance 0
# Exact equality required
# With reported closing 103.01:
# tolerance 0.01 -> match; tolerance 0.009 -> mismatch

Investigate before adding an adjustment

Review signs, period, currency, unit and cash definition first. Then review FX and independently disclosed scope changes. An additional entry such as {"label":"Scope change","amount":"5"} is transparent only if there is a source for it. The CLI will add it; it cannot verify the explanation.

Do not raise a tolerance to conceal a difference of 2 caused by dropping the sample's -2 FX effect. Restoring the input and relaxing the threshold answer different questions. Keep the untouched transcription, the revised file and a short reason for the change.

What a pass does not say

The result does not certify a filing, reconcile different cash definitions, establish the ownership of restricted balances, or estimate future cash generation. Its deliberately narrow promise is reproducible addition with explicit assumptions. All examples are synthetic; no buy/sell recommendation follows from the output.

Once signs, units and cash scope are consistent, an unexplained difference calls for reviewing the disclosures rather than adding a balancing plug. The related Eqvero company research entry supports further source-linked investigation; it does not turn this arithmetic result into a verified financial conclusion.

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