I think there's a small error in the explanation here. Round never returns a result of type decimal(8,6) because every decimal result that it returns has precision 38 - the datatype for decimal and numeric types is changed by round to decimal(38,s) where s is the scale of the original type. This is documented quite clearly in BoL (http://msdn.microsoft.com/en-us/library/ms175003.aspx). So it will return a value of type decimal(38,6) which is then implicitly converted to decimal(5,2) for the assignment.