Soft Rounding for Multiple Line Items

When a voucher or invoice includes more than one line item, the system uses soft rounding to minimize discrepancies that might occur when the rounded amounts for each line are totaled. For example, suppose that you had 10 line items on a voucher, and the taxable amount of each line is 963, and the tax rate is 3.8%. The unrounded tax amount for each line would be 36.59 and the rounded amount, using either the rounding method or the rounding up method, would be 37. If you added the rounded tax amount (37) for each line, the total would be 370. However, if you multiple the total of the taxable amount (9630) by the tax rate of 3.8%, the total is 365.94. In this example, you would pay more tax (370) than if the tax was calculated on the total amount.

To perform soft rounding, the system adds or subtracts the rounded off amount to the unrounded tax amount of the next line. The rounded off amount is the difference between the unrounded tax amount and the rounded tax amount. Then the system uses the rounding method that you specified (round, round up, or round off) to round the total of the rounded off amount from the first line and the unrounded amount of the second line. The system continues to add or subtract the rounded off amount to the unrounded tax amount for each successive line of the voucher or invoice.

For transactions in Japan for which you associate a rounding method to the tax rate area, the system first uses the tax rounding method that you specify in the Setup Rounding Options program and then applies soft rounding.

This table shows an example of how soft rounding works for 10 line items with a taxable amount of 963, a tax rate of 3.8%, and the rounding method for rounding tax amounts:

Line	Unrounded Tax Amount and Rounded Off Amount from Previous Line	Rounded Tax Amount	Gross Amount
1	36.59	37 .41 was added when the amount was rounded, so .41 must be subtracted from the next line.	963 taxable amount + 37 rounded tax amount = 1000
2	36.59 − .41 = 36.18	36 .18 was subtracted when the amount was rounded, so .18 must be added to the next line.	963 + 36 = 999
3	36.59 + .18 = 36.77	37 .23 was added when the amount was rounded, so .23 must be subtracted from the next line.	963 + 37 = 1000
4	36.59 − .23 = 36.36	36 .36 was subtracted when the amount was rounded, so .36 must be added to the next line.	963 + 36 = 999
5	36.59 + .36 = 36.95	37 .05 was added when the amount was rounded, so .05 must be subtracted from the next line.	963 + 37 = 1000
6	36.59 − .05 = 36.54	37 .46 was added when the amount was rounded, so .46 must be subtracted from the next line.	963 + 37 = 1000
7	36.59 − .46 = 36.13	36 .13 was subtracted when the amount was rounded, so .13 must be added to the next line.	963 + 36 = 999
8	36.59 + .13 = 36.72	37 .28 was added when the amount was rounded, so .28 must be subtracted from the next line.	963 + 37 = 1000
9	36.59 − .28 = 36.31	36 .31 was subtracted when the amount was rounded, so .31 must be added to the next line.	963 + 36 = 999
10	36.59 + .31 = 36.90	37	963 + 37 = 1000