US rules define portfolio reconciliation as exchanging the material terms of all swaps with a counterparty, exchanging each swap's valuation as of the close of business on the previous business day, and resolving any discrepancy in terms and valuations1. EU rules cover the key trade terms that identify each contract and, at least, the valuation of each contract2.
Consider a hypothetical example in which two firms exchange valuations of three swaps and the totals differ, 130 million yen against 125 million yen. They compare the terms to find the cause. If the cause is an input error in one firm's notional amount, that firm corrects its record and recalculates the valuation.