This article is meant to help you understand how Rounding adjustments affect the data in the MDFM. To maintain formula integrity, balance statements, and preserve a clean audit trail, preparers should follow a strict sequential order if rounding adjustments are needed: adjust at the Fund Level first, proceed to Budgetary Schedules, and complete the process with Government-Wide statements.
Why a Rounding Review Matters Overview
Rounding differences are usually just a few dollars, but the order you fix them in matters. Start at the Fund Level, then the Budgetary Schedules, then Government-Wide. Fixing things out of order can hide the real source of a difference or create a new one. Watch this video to learn more.
Good to know: The system already keeps statements in the same fund category in sync. The total on each Combining Statement always matches the consolidated column on the Fund-Level Statement, so you only need to handle differences caused by the math itself.
Use this graphic as your roadmap. The detailed steps follow.
The rounding sequence: Fund Level, then Budgetary Schedules, then Government-Wide.
Click the image above to zoom in.
Key Terms to Know
- Rounding adjustment: A small manual entry (usually a few dollars) that clears a difference caused by rounding. You decide which line item to adjust based on your reporting approach.
- Lowest-level (leaf) line: A line at the bottom of the statement structure that holds an actual amount, not a subtotal. These are the lines you round.
- Calculated line: Totals built from a formula, such as Operating Income or Beginning and Ending Balance. Never round these directly. They correct themselves.
- Target: The number the check is tied to. For financial statements, the target is the Ending Balance. For Budgetary Schedules, the target is usually the Actual column.
Troubleshooting
Issue: The difference is more than a few dollars.
Solution: This usually signals a data or mapping issue, not rounding. Check for unmapped accounts and review your source data before posting any rounding adjustment.
Issue: I made adjustments out of order and now nothing ties.
Solution: Return to Part 1, Step 1 and work forward through each step again. Remove any adjustments that are no longer needed along the way.
Note: A Beginning Balance rounding line is not a restatement or prior-period correction. Under GASB, restatements and prior-period corrections are separate from rounding and must be presented on their own line in the statement.
Frequently Asked Questions (FAQs)
Q: Why doesn’t Disclosure Studio round everything automatically?
A: The system automatically keeps Combining Statements and Fund-Level Statements in sync. Rounding differences that come from the math itself can be fixed on more than one line, and choosing that line is a reporting decision. That’s why you choose where the adjustment goes.
Q: Where do I start when rounding?
A: Always start at the Fund Level (Part 1, Step 1). Adjustments made there flow through to the Fund-Level and Government-Wide statements, so many Government-Wide differences clear up on their own.
Q: How do I know a difference is really rounding?
A: Rounding differences are typically just a few dollars. Anything larger usually means an unmapped account or a data issue that should be fixed at the source.
Q: Which number should I round toward?
A: For financial statements, the target is the Ending Balance. For Budgetary Schedules, it is usually the Actual column.
Q: Do Component Units follow different rounding rules?
A: No. Component Units follow the same Fund Level steps in Phase 1: Fund Level Statements whether they are in a separate linked model or directly in the Government-Wide statements.
Q: Is a rounding adjustment the same as a restatement?
A: No. Restatements and prior-period corrections are separate from rounding under GASB and must be presented on their own line.
Ready to get started?
Since Rounding is part of a larger review process, we recommend utilizing the Review and Reconcile Financial Data process overview to help you take action. Be sure to follow this process from start to finish with no deviations to ensure accuracy.
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