Source: Warhammer Fantasy: 4th Edition

Lapping Around
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If a unit wins the combat it can bring models from the rear ranks and place them forward to increase the width of the formation allowing more models to fight. You can increase the width of the formation by up to 2 models on either flank.

If a unit wins the combat and its formation already extends to the enemy's flanks, then you may move models from the rear ranks round the sides of the enemy unit. You may move up to 2 models around each flank, assuming that there is room and that the flank is not blocked by another unit, a building, or other terrain. Once models have covered the enemy's flanks you can move around the rear should you win a further turn, extending your line and surrounding the enemy unit completely. These extra models are described as lapping round.

Models which are lapping round do not count as being within the unit's formation, so lapping round models in this way does not negate your usual rank bonus if this applies. If the unit is defeated in a subsequent turn of hand-to-hand fighting then any models lapping round are immediately returned to the rear rank. It is assumed they have been fought off.

Models which are lapping round do not count as making a flank or rear attack unless there are 5 or more models lapping round onto the sides or rear of a unit. Should this occur then the flank/rear attack combat bonus does apply. This will either be +1 for a flank attack or +2 for a rear attack.

lapping-around-1
Lapping models from a rear rank move to the enemy's flank.
lapping-around-2
Lapping models from a rear rank move to the enemy's rear.