FAQ 2223: Rounding Weighted Factors and Earnings

Problem: How does rounding work in the ASC System for weighted factors such as contribution transactions?

Solution: This is the nature of rounding. We believe it is many more than just 6, before it gets rounded for other purposes. Using these weighted factors below and rounding to 8 instead of 6, you get a sum of exactly 1.0. 1. Weighted Factor for EE = 67,768.4411 ÷ 822,118.6573 = 0.0824314598607517 = 0.08243146 (rounded to 8 digits) 2. Weighted Factor for ER = 430,624.4361 ÷ 822,118.6573 = 0.5237983985356271 = 0.52379840 (rounded to 8 digits) 3. Weighted Factor for OPT = 323,725.7801 ÷ 822,118.6573 = 0.3937701416036213 = 0.39377014 (rounded to 8 digits) 4. Weighted Factor for TRNSFR = 0 082431459 If rounding this number its possible to round to .082432 which pushes the samples above to 1.000000 (.0824315 could be rounded up to .082432 and to reduce it further the rounding up stops .08243, .0824, .082, .08) The sum of Weighted Factors by Fund Source is equal to 1.0. Since your example is a “hypothetical”, it is difficult to know what the system does without reviewing the actual detailed results on every level of the calculation. It is possible that when the result at “x” decimals is .999999, that the programmer assumes a 1.000000 weighted factor total. We don't agree with the conclusion that the actual Interest Earnings allocated will not add up to the Total Interest Earnings amount. The program allocates pro-rata at x decimals, and a 2-decimal earnings amount should not be short by a penny. Every calculation is designed to work with the precision of the fund/source, sometimes they are different. There comes a point in the numbers that a decision needs to be made to round up or down.