---
title: "Rate Reconciliation 5% Threshold Classifier"
method: POST
path: "/v1/tools/classify_rate_rec_5pct_threshold"
tags: ["compliance_mandate", "asc-740", "income-tax-disclosures", "asu-2023-09", "rate-reconciliation", "five-percent-threshold", "property-tested", "mcp:classify_rate_rec_5pct_threshold"]
---

# Rate Reconciliation 5% Threshold Classifier

`POST /v1/tools/classify_rate_rec_5pct_threshold`

## Request

- Base URL: `https://ainumbers.co`
- URL: `https://ainumbers.co/v1/tools/classify_rate_rec_5pct_threshold`
- Auth: none declared

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. 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 the declared category. The comparison is taken in absolute amount on both sides per BC35 of the Update, corroborated by 740-10-50-12A(b)(2), which is what makes the test well defined for a loss making entity. The category enum has nine members: the eight closed by 740-10-50-12A(a) plus the item within none of them that 740-10-50-12A(b)(3) addresses. Verdicts are decided by exact cross multiplication on unrounded inputs, never by rounding a percentage and then comparing. A zero threshold base is reported as not assessable with a named caveat rather than divided silently, per BC38.

**Tool URL:** https://ainumbers.co/chaingraph/art-635-rate-rec-5pct-threshold-classifier.html

## Request body

- object
  - `reconciling_item_category` string
  - `reconciling_item_amount` number, required
  - `pretax_income` number, required
  - `statutory_rate_pct` number, required
  - `entity_is_public_business_entity` boolean

## Response `200`

Successful tool execution result

- object
  - `reconciling_item_category` string, nullable
  - `category_recognized` boolean
  - `reconciling_item_amount` number, nullable
  - `pretax_income` number, nullable
  - `statutory_rate_pct` number, nullable
  - `entity_is_public_business_entity` boolean
  - `threshold_base_amount` number, nullable
  - `threshold_amount` number, nullable
  - `pct_of_threshold_base` number, nullable
  - `crosses_5pct_threshold` boolean, nullable
  - `must_disclose_separately` boolean, nullable
  - `required_disaggregation` string, nullable
  - `disaggregation_citation` string, nullable
  - `denominator_near_zero_caveat` string, nullable
  - `management_judgment_required` boolean
  - `not_assessable_reason` string, nullable
  - `break_even_judgment_note` string
  - `citation` string
  - `basis` string

---

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