3) Decomposition

Decompose each operation into individual elements based on the level of nesting.

The number of iterations may vary depending on the nesting level of the CRA structure.

2) Enrichment

If elements exist in the formulas but not at the ID level, then add the individual elements to the main flow.

1) Preprocessing

Initial transformations: converting operation types to row format (add, subtract) and breaking down operation elements into lists.

4) Element Signs Calculations

Transformations to compute the final sign of individual operations (by aggregating through multiplication).

5) Finalization of Processing

Retrieve the operation data to build the quantified P&L (Profit and Loss). Then, compute the amounts taking into account the signs of the operations, and group them based on the final labels of the income statement.

6) Outputs

0) Inputs

PROFIT & LOSS: FINANCE STATEMENT MODELING

Operating Principle:

1) Starting with a Profit & Loss structure file, the initial phase of the process pre-processes the file to break down all operations into individual transactions, whether they are subtotals or totals.
We operate on the assumption that subtotals and totals aren't inherently present in the data. Hence, it is crucial to decompose them for clarity.

2) Once the compound elements are decomposed, we can then link the various operations to the account hierarchy through straightforward joins.

Special cases that this workflow effectively addresses include:

1) Decomposition, regardless of the level of nesting from totals to subtotals and from subtotals to basic elements, is attainable. However, setting the maximum number of recursive loop executions is essential. When in doubt, setting a high iteration count is recommended.

2) Accounting for operations that might not be listed as identifiers in the P&L structure. In such instances, they might otherwise be lost in the recursive loop.

3) Basic negative entries are handled distinctly. In the recursive loop, due to auto-join, we could lose the sign information (-1*-1=+1) if they're processed similarly to basic addition transactions or compound operations.
At a certain decomposition point, we cannot let the result's sign hinge on the number of loop iterations. To manage this, we first convert all basic negative operations into positive ones, flagging them for identification.
Subsequently, a transformation reverts these flagged elements back to their negative state, using flow flags for the purpose.