Welcome to CaseWare QuickVids.
This QuickVid will demonstrate using rounding relations in the financial statements.
Rounding relations are used to change the appearance of figures in the financial statements
and to balance the financial statements.
Rounding relations affects only cells in the financial statement document.
It does not affect any numbers in the Working Papers trial balance.
Rounding relations can be set in the financial statement document, the firm libraries and
the cash flows worksheet.
This QuickVid will; 1.
Review basic rounding relations 2.
Apply a rounding relation 3.
Modify a rounding relation 4.
Review advanced rounding relations
Please note rounding relations are not the same as currency rounding to thousands or
millions.
Rounding relations as they pertain to this QuickVid maybe necessary due to decimals in
the trial balance rounding to whole number in the financial statements therefore creating
discrepancies between two line items that should match.
Rounding relations are designed to automatically resolve these rounding issues in the financial
statements.
Once rounding relations are applied the following message appears if rounding errors are occurring.
This can be turned off from the Options drop-down in the financial statements.
Opening the Financial statements as a default rounding relations are turned off.
To access rounding relations.
From the template menu, select Options.
There two options applicable to rounding relations, modify and apply rounding relations.
Select Modify rounding relations.
The rounding relations freeze opens displaying all the rounding relation options.
From here you are able to Add, Modify and Delete rounding relations.
A rounding relationship is created between any three cells.
It works as follows: the difference between "Cell A" and "Cell "B" is adjusted to "Cell
C", provided the difference between Cell A and Cell B does not exceed the established
tolerance.
Each of these cells must be defined by the user.
Select Modify a rounding relations.
Select the "Label" drop-down.
CaseWare provides preexisting rounding relations for the Balance Sheet and Cash Flows.
Any rounding relation that was set up in the content libraries is imported into the financial
statements when content is inserted.
Your firm may have modified this or added additional relations in the library.
Classified #11 is a rounding relation established in the Balance sheet in the current year,
while Classified # 12 is a rounding relation established for the prior year.
It is important to remember to review rounding relations for all the periods displayed in
a format.
Select Classified #11.
Notice Cell A, B, C are populated with cell numbers and the title and period of the cell
are displayed.
Click on the Cell a, Cell B, or Cell C Box and the cells are highlighted in the financial
statement document.
A permanent method to view which cells are affected by rounding relations, from the CaseView
menu select View | Preferences and select "View rounding flags".
Select OK.
Double-click Cell A to jump to the cell within the financial statements.
In this example, if the difference between Total Assets and Total Liabilities and Equity
is less than 5 the difference will be adjusted positive or negative to "Payables".
When modifying a rounding relation you are able to modify any CaseWare, Firm or engagement
created rounding relation.
For this demonstration selecting Cell A, taking note of the value, then selecting cell B the
difference between these two cells is 3.
To apply a rounding relation, from the template menu select Options | Apply rounding relations.
Once applied, a value of 3 is added to the payables line and the balance sheet balances.
Due to the option "View rounding flags" established in Preferences, notice flags appear in the
cell indicating it is a part of a rounding relation.
In this example there is no other value in the payables line item therefore this is not
an appropriate line to round to.
With the rounding still open change Cell C to Receivables.
Take note of the value.
Select Save, the value in receivables is changed by 3, no value is present in the payables
line and the balance sheet is balanced.
If we modify the tolerance for this rounding relation to two, select Save.
When a rounding relation exceeds the tolerance numerous Recalculation errors will appear.
When an error message appears, it is necessary to review your financial statements and correct
the error.
Please note the dialog will appear multiple times until the rounding discrepancy is resolved
for all the rounding relations in the financial statements.
In this simple example changing the tolerance to 5 again and selecting Save resolves the
recalculation errors.
Additional features within the rounding relations freeze are the ability to add and delete rounding
relations.
For advanced users, if desired, multiple rounding relations can be set by using the plug condition.
The Plug condition is the condition that makes this cell be skipped as the plug cell.
If the condition is evaluated to be true, the difference is not plugged here and another
plug cell is searched for.
If the condition is evaluated to be false, the value of the difference between cells
A and B goes in cell C. Use "Add" to create additional cells for multiple plug conditions.
Use "Delete" to remove cells from the multiple plug condition.
Rounding relations combined with Financials feature to link from note, statement and schedules
combined become invaluable tools in enhancing the ability to automate your financial statements.
That concludes the QuickVid on rounding relations, thank you for watching CaseWare QuickVids.