Year-End Closing & Financial Statement Preparation (Year-End Settlement)

Load Settings (Execute First)

1. Load the

   shinkoku.config.yaml

   file using the Read tool
2. If the file does not exist, guide the user to execute the

   /setup

   skill and exit
3. Understand the configuration values, and convert relative paths to absolute paths based on the CWD:

   • db_path

     : Used for the

     --db-path

     argument in CLI scripts

   • output_dir

     : Base directory for outputting progress files and other items
   • Each directory: Used when referencing files

Path Resolution Example

db_path

./shinkoku.db

output_dir

./output

/home/user/tax-2025/

• ledger.py trial-balance --db-path /home/user/tax-2025/shinkoku.db --input query.json

• shinkoku ledger bs --db-path /home/user/tax-2025/shinkoku.db --input query.json

Load Progress Information

1. Load

   .shinkoku/progress/progress-summary.md

   using the Read tool (if it exists)
2. Load the following handover files using the Read tool (if they exist):

   • .shinkoku/progress/04-journal.md

   • .shinkoku/progress/02-assess.md

3. Utilize the loaded information in subsequent steps (avoid re-asking the user)
4. If the files do not exist, skip this step and directly confirm necessary information with the user

Basic Guidelines

• Confirm that journal entries have been completed using the journal skill before starting the settlement process
• Verify account balances in the trial balance sheet to determine the need for year-end closing journal entries
• Calculate depreciation based on the rules in references/depreciation-rules.md
• Always confirm year-end closing journal entries with the user before registering them
• Finally, verify that total assets equal total liabilities plus equity in the balance sheet

Prerequisite Checks

1. Have daily journal entries been completed?: Prompt the user to confirm there are no unrecorded transactions
2. Fiscal year: Confirm the target year (e.g., January 1 to December 31, 2025)
3. Blue return type: ¥650,000 deduction (double-entry bookkeeping + e-Tax/electronic book storage), ¥550,000 deduction (double-entry bookkeeping + paper submission), ¥100,000 deduction (simplified bookkeeping)
4. Confirm prior year's final tax return: Check the following from the assess skill results or prior year's tax return
   • Presence and amount of estimated tax payments (prepayment of income tax)
   • Presence of net loss carryforward deductions
   • Whether the prior year's ending balance matches the current year's opening balance
   • Accumulated depreciation amount from the prior year (if there are fixed assets)

0-1. Confirm & Set Opening Balances

1. Check if opening balances have been set using

   ledger.py ob-list --db-path DB --fiscal-year YEAR

2. If not set, confirm the following with the user:
   • Is it the first year of business? (→ No opening balance, skip)
   • Ask the user to provide the ending column of the prior year's final tax return (balance sheet from the blue return settlement statement)
   • Use OCR to read if it is an image/PDF
3. Batch register the prior year's ending balances using

   ob-set-batch

4. After registration, verify the content using

   ob-list

   and obtain user approval

Step 1: Verify Trial Balance Sheet

Call

ledger.py trial-balance

shinkoku ledger trial-balance --db-path DB_PATH --input query.json

{
  "fiscal_year": 2025
}

• accounts

  : Debit total, credit total, and balance for each account

• total_debit

  : Total debits

• total_credit

  : Total credits

1. Do total debits equal total credits?
2. Are each account's balances reasonable? (Are there any negative balances?)
3. If there are balances in the following accounts, year-end closing is required:
   • Prepaid expenses (1060) → Settle and transfer to appropriate accounts
   • Unearned revenue (2060) → Confirm details and transfer
   • Prepaid consumption tax (1090)/Accrued consumption tax (2070) → Reflect consumption tax calculation results

Step 2: Register Year-End Closing Journal Entries

ledger.py add-journal --db-path DB_PATH --input journal.json

2-1. Record Depreciation Expense

shinkoku tax calc-depreciation --input depreciation_input.json

{
  "method": "straight_line",
  "acquisition_cost": 300000,
  "useful_life": 4,
  "business_use_ratio": 100,
  "months": 12
}

{
  "method": "declining_balance",
  "acquisition_cost": 300000,
  "book_value": 200000,
  "useful_life": 4,
  "declining_rate": 500,
  "business_use_ratio": 100,
  "months": 12
}

Debit: Depreciation Expense (5200) / Credit: Corresponding Fixed Asset Account
Amount: Calculated depreciation amount

• Refer to references/depreciation-rules.md for useful life
• If the business start date is mid-year, calculate on a monthly pro-rata basis
• For lump-sum depreciation assets (1160), record 1/3 of the acquisition cost (equal depreciation over 3 years)
• If there is a household allocation, only record the amount multiplied by the business use ratio

2-2. Evaluate Inventory Assets

Register Inventory Data

ledger.py list-inventory --db-path DB_PATH --input query.json

ledger.py set-inventory --db-path DB_PATH --input inventory.json

{
  "fiscal_year": 2025,
  "detail": {
    "period": "ending",
    "amount": 200000,
    "method": "cost",
    "details": "Item details, etc."
  }
}

Register Inventory Journal Entry

Ending Inventory Journal Entry:
Debit: Inventory Assets (1030) / Credit: Purchases (5001)  Amount: Ending inventory amount

Opening Inventory Journal Entry (Memo for automatic transfer to next period's opening):
Debit: Purchases (5001) / Credit: Inventory Assets (1030)  Amount: Opening inventory amount

• Confirm the ending inventory quantity and unit price with the user
• Confirm the valuation method (e.g., last-in first-out cost method)
• Cost of Goods Sold Calculation: Opening inventory amount + Purchases amount - Ending inventory amount
• Registered inventory data is automatically reflected in

  ledger.py pl

  and the blue return settlement statement PDF

2-3. Record Accrued Unpaid Expenses

Debit: Corresponding Expense Account / Credit: Accrued Expenses (2031)

• December rent (if paid the following month)
• December utility and communication fees
• Unpaid social insurance premiums

2-4. Record Prepaid Expenses

Debit: Prepaid Expenses (1041) / Credit: Corresponding Expense Account

• Portion of annual insurance premiums applicable to the next period
• Portion of annual subscription fees applicable to the next period

2-5. Verify Accounts Receivable & Accounts Payable

• Confirm that the accounts receivable (1010) balance matches the list of uncollected invoices
• Confirm that the accounts payable (2001) balance matches the list of unpaid supplier invoices
• If there are uncollectible accounts receivable, consider transferring them to Bad Debt Expense (5260)

2-6. Verify Proprietor Accounts

• Proprietor's Drawings (1200): Total amount used for personal purposes from business funds
• Proprietor's Contributions (3010): Total amount used for business purposes from personal funds
• These are not offset in the settlement process (carry over to the next period's opening with initial deposit processing)

Step 2.7: Register Rent Breakdown

Call

ledger.py add-rent-detail

shinkoku ledger add-rent-detail --db-path DB_PATH --input rent.json

{
  "fiscal_year": 2025,
  "detail": {
    "property_type": "Home & Office",
    "usage": "Home & Office",
    "landlord_name": "Landlord Name",
    "landlord_address": "Landlord Address",
    "monthly_rent": 100000,
    "annual_rent": 1200000,
    "deposit": 0,
    "business_ratio": 50
  }
}

• For home & office properties, confirm that the business ratio is set appropriately
• Confirm that annual rent = monthly rent × number of payment months is correct
• Register all properties if there are multiple

Step 3: Generate Settlement Statements

3-1. Verify Income Statement (

ledger.py pl

)

shinkoku ledger pl --db-path DB_PATH --input query.json

{
  "fiscal_year": 2025
}

• revenue

  : Breakdown and total of revenue

• expenses

  : Breakdown and total of expenses

• net_income

  : Net income for the period (total revenue - total expenses)

• Does the sales amount match actual results?
• Is each expense account reasonable? (Are there any abnormally large/small accounts?)
• Confirm the income amount before the blue return special deduction

3-2. Verify Balance Sheet (

ledger.py bs

)

shinkoku ledger bs --db-path DB_PATH --input query.json

{
  "fiscal_year": 2025
}

• assets

  : Breakdown and total of assets

• liabilities

  : Breakdown and total of liabilities

• equity

  : Breakdown and total of equity

• Does total assets equal total liabilities plus total equity? (Balance sheet equality)
• Does the cash and bank deposit balance match the actual balance?
• Is the book value of fixed assets the amount after depreciation?

Step 4: Present Settlement Result Summary

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Settlement Result Summary (FY ○ Reiwa)
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

■ Income Statement
  Sales:         ○○○,○○○ JPY
  Cost of Goods Sold:       ○○○,○○○ JPY
  Total Expenses:       ○○○,○○○ JPY
  Income Before Blue Return Special Deduction: ○○○,○○○ JPY

■ Balance Sheet
  Total Assets:       ○○○,○○○ JPY
  Total Liabilities:       ○○○,○○○ JPY
  Total Equity:     ○○○,○○○ JPY
  Balance Difference:       0 JPY (Matching)

■ Year-End Closing Journal Entries: N Items
  - Depreciation Expense: ○○○,○○○ JPY
  - Inventory Adjustment:   ○○○,○○○ JPY
  - Accrued Expenses:   ○○○,○○○ JPY

■ Next Steps:
  → Calculate income tax using /income-tax
  → Calculate consumption tax using /consumption-tax
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Output Handover Files

Output Step-by-Step Files

.shinkoku/progress/06-settlement.md

---
step: 6
skill: settlement
status: completed
completed_at: "{Current Date YYYY-MM-DD}"
fiscal_year: {tax_year}
---

# Year-End Closing & Financial Statement Preparation Results

## Income Statement (PL) Summary

- Sales: {Amount} JPY
- Cost of Goods Sold: {Amount} JPY
- Total Expenses: {Amount} JPY
- Income Before Blue Return Special Deduction: {Amount} JPY

## Balance Sheet (BS) Summary

- Total Assets: {Amount} JPY
- Total Liabilities: {Amount} JPY
- Total Equity: {Amount} JPY
- Balance Difference: {Amount} JPY (Matching/Not Matching)

## List of Year-End Closing Journal Entries

| Description | Debit Account | Credit Account | Amount |
|------|---------|---------|------|
| {Depreciation Expense, etc.} | {Account Name} | {Account Name} | {Amount} JPY |
(Include depreciation, rent allocation, inventory adjustment, accrued expenses, etc.)

## Next Steps

Calculate income tax using /income-tax
Calculate consumption tax using /consumption-tax

Update Progress Summary

.shinkoku/progress/progress-summary.md

• YAML frontmatter: fiscal_year, last_updated (current date), current_step: settlement
• Table: Update the status of all steps (set settlement to completed)
• Include guidance on next steps

Guidance After Output

• "Handover files have been saved to

  .shinkoku/progress/

  . Results can be carried over to the next skill even if the session is interrupted."
• Guidance on next steps