When Apply advanced rounding rules has been selected, a series of reconciliations and rounding adjustments will be carried out to make sure the rounded closing position, for each Partner’s Capital Account and each separate account code, matches the rounded opening position in the subsequent accounting period.
When considering the carried forward and brought forward amounts for any Partners Capital Account, the individual partner capital account postings to accounts 7000, 7010, 7020 and 7030, along with the individual partners profit share, are taken into account. Where there would be a difference between the rounded total of all the unrounded added amounts i.e. the amounts that would be brought forward, and the total of all the rounded added amounts i.e. what would be carried forward, an adjustment will be made to correct this and ensure that the brought forward and carried forward amounts match.
Partner 1 – capital account:
Where a difference exists between the two amounts above, adjustments would be made to the rounded amounts to account for this difference.
Rounding adjustments are not applied to the brought forward code itself (7000) or to any accounts which are inactive i.e. they have either no postings and/or an account balance of £nil.
An equal and opposite amount is posted to the Balance Sheet rounding account to make sure the Trial Balance still balances.
The account to which the rounding difference is allocated can NOT be changed.
See KB3094 - What are Advanced Rounding Rules? for more information.