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Article ID: 3250
Last updated: 21 Jun, 2022
When Apply advanced rounding rules has been selected, a series of reconciliations and rounding adjustments will be automatically carried out to make sure the rounded closing position, for the Sole Trader’s Capital Account, matches what the rounded opening position in the subsequent accounting period would be. When considering the carried forward and brought forward amounts for the Sole Trader’s Capital Account, the postings to accounts 7000, 7010 and 7020, along with the profit, 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. For Example Sole Trader – 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 or accounts to which the rounding difference is allocated can NOT be changed. See KB3094 - What are Advanced Rounding Rules? for more information.
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