Re: Setting up Limited company

Tim wrote:

"Tim" wrote:
And presentation of accounts where an underlying figure
of (say) 15.45 is rounded to 16 looks equally sloppy...

"Ronald Raygun" wrote
Not really, because it can only look sloppy to those
who have the benefit of being able to see both sets of
figures. Typically this will be no more than two people,
the person who drew up the exact figures and produced
the rounded ones, and the person who checked it all...

Please get real!!

Do you really think that, in a huge multi-national company,
that no-one else helps in the calculating of the intermediate
figures and that after the accounts have been prepared
(rounded), that all the working papers are destroyed?

For a start, how would the auditors check the accounts?

The same reasoning applies. What in a penny-ante outfit will be
two people, will in a huge multi-national be two teams of people,
one to produce them, one to audit them.

The point is that the "consumers" of the rounded figures will
far outnumber those who have been involved in their production
and scrutiny.

"Ronald Raygun" wrote
Most of the people for whom the rounded figures are
produced will never see the unrounded ones. To *them*
it will look sloppy if the figures *they see* do not add up.

Ah, but "... these people should be well aware of the consequences
of rounding", and thereby realise it's simply rounding differences.

Some of them perhaps, some of them not.

"Ronald Raygun" wrote
We reject option 2 because rounding 4.12 to
5 is perhaps too much of a misrepresentation.

Option 3 is attractive because at least it keeps the
ratios the same, but there could be an overruling
requirement for the total to be more right than the
elements, and this could force us to go for option 1.

Who is going to set these "policies" ? :-(

Does it matter? Somewhere, someone will have decided that either
the rounded figures should be made to add up properly or else
that they should be as close as possible to the unrounded ones.
If the former, then the need for judicious adjustments is generally
unavoidable.

If it is acceptable for the figures to be "only approximately right",
which if rounding is at all acceptable is clearly the case, then if
it's OK for an amount to be up to half a pound out (or half a million
if that's the granularity), then why should it be particularly
worrying if the odd figure here and there is up to 3 or 5 half pounds
out?

"Ronald Raygun" wrote
... The sum of subtotals itself will want to "add up
properly", and in consequence our hand may be
forced by the higher context, which may impose on
us a value which our subtotal needs to take, limiting
our choice of options further down the hierarchy.

Hmmm. Might this mean that 15.45
could even get rounded to 17? My my!

Yes indeed it might. So what?

.

Relevant Pages

  • Re: Setting up Limited company
    ... how would the auditors check the accounts? ... of rounding", and thereby realise it's simply rounding differences. ... much the reader thinks it might be out by that really matters. ... pound, which might be 3 or 5 half pounds out (but the reader ...
    (uk.business.accountancy)
  • Re: demonic problem descriptions
    ... >> The last company I worked at doing financials was a long distance ... >> direct and third party billing, taxes, commission accounts, ... > rounding to the nearest 1000 anyway. ... write a set of fixed point math functions- add, subtract, multiply, ...
    (comp.lang.lisp)
  • Re: Setting up Limited company
    ... If we display rounded representations of real numbers we lose the ... interpretation of rounding arithmetic. ... If you seriously think any user of accounts will be ... can deal with progress. ...
    (uk.business.accountancy)
  • Re: Setting up Limited company
    ... On my standard accounts I never bothered, ... for display rather than rounding for sub calculations. ... Making people face up to the realities of rounding is a good thing. ... You want the total to round back to the same total it was with pennies ...
    (uk.business.accountancy)