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Currency management

Rounding rules

Rounding rules and rounding precisions govern rounding. Rounding rules define how a currency is rounded while rounding precision describes the number of decimal places to use for a currency.
In Determination, you can set a rounding rule in a company currency specification to one of the following:
  • Ceiling
     - Rounds up to the integer specified by the currency's precision.
  • Floor
     - Rounds down the integer specified by the currency's precision.
  • Round
     - Rounds values up or down to the nearest integer specified by the currency's precision.
In tax calculations, the following rules control rounding:
  • Amounts get rounded at the lowest level then summed. Tax amounts are rounded 1st, line amounts are rounded 2nd, then invoice amounts are rounded last. The result's a sum of the rounded value, not a rounded sum of unrounded values.
  • Rounding information's returned in the <ROUNDING_RULE> and <ROUNDING_PRECISION> elements in the invoice level XML output.
  • Determination returns rounded and unrounded results for most amounts in the system. You can turn rounding off in the results for each transaction by setting the <IS_ROUNDING> element to false in the invoice level XML input.

Line level rounding

The U.S. rounding algorithm rounds at the line level (a combination of all tax authorities) rather than rounding at the tax authority level. The combination of U.S. tax authorities supported in U.S. tax data that apply to the transaction get combined and applied against the total taxable amount. Rounding is performed on this calculation. The algorithm then calculates tax at each tax authority level for reporting purposes. If the calculation at each tax authority level doesn't match the combined calculation, there's a rounding difference. Any rounding differences are allocated to the tax authorities based on absolute values. In the event of a tie, the remaining difference gets allocated to the highest level tax authority.

Document level rounding

In some national or economic zones, companies are required or can elect to calculate taxes at the invoice (or document) level. Document level rounding lets Determination calculate taxes at the document level to increase compliance with rounding requirements in locations like the European Union and the Asia-Pacific region.
Document level rounding includes:
  • The ability to specify rounding at the document level.
  • The ability to select document level rounding by country.
  • Accurate calculation of taxes at document level so that the sum of the taxes at the line level equals the same total taxes as if the taxes were calculated based on the invoice total.
  • Messages, which state whether the document level round was applied, are returned in the XML output.
In a rounding group, the system groups items by ERP tax code, rate, and direction (input or output), and it requires the direction.

Document level rounding exclusions

  • The U.S., its possessions, territories and protectorates, Canada and Brazil are excluded from document level rounding. Line level rounding's applied to U.S. transactions.
  • Document level rounding isn't applied to invoices with multiple taxing countries. Line level rounding's applied to these transactions.
  • Tiered and graduated rates don't apply to document level rounding. Line level rounding's applied to these transactions.
  • Document level rounding doesn't apply to currency conversions. It applies to only document level currency.

Group by Tax Rate Document rounding

This organizes items within an invoice according to their
Tax Rates
. During this process, rounding is applied to the calculations. The algorithm then compares the unrounded and rounded values for each
Tax Rate Group
. If there is a discrepancy between these values, the rounding differences are then distributed in units of 1 (depending on the rounding precision and settings) to the line items with the highest absolute gross amounts. If there are 2 line items with the same gross amount, the adjustment is applied to the 1st one that appears.
To turn on this new functionality, you also need to enable the “Document Rounding” feature for the company and country.

This article applies to:

  • Product: ONESOURCE Determination, ONESOURCE Indirect Tax

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