Hi Jim, actually, I completely understand the original proposal and I understand why he wants to have that functionality, and why you have set up your accounts the way you described. While planning my initial GnuCash setup, this structure was the obvious one to me, too, when I first thought about it. Then I did some testing on sample data like the one in my little Argentina restaurant example (which for my purposes will in fact be a significant problem).
So, while everyone naturally can and should choose the structure that works for them, I just mentioned my example as a caveat to what COULD happen when working with the mentioned structure, especially if GnuCash had some kind of auto feature that facilitated such a structure. I realize the problem will be relatively small as long as exchange rates of the relevant currencies stay in a somewhat narrow corridor to each other. But with huge and permanent changes like we have seen with ARS (since forever) and in recent months even with most currencies against the USD, one at least needs to be aware of this problem. Otherwise, you could spend all this work on your GnuCash books and then realize a few years down the road that much of the meaning of the numbers has been eliminated because one or more currencies lost a lot of their value against the USD for example. As far as I understand, one possible approach for people who don't want to (or can't for regulatory purposes) convert to their main currency for every single transaction could be this: Enter a transaction from the expense/income account denominated in a non-base currency to the same expense/income account denominated in your base currency every so often (like once a year, or whenever exchange rates changed significantly) to reset those accounts to zero. This way, at least the problem of ballooning balances on the trading accounts would be solved and the degradation of meaning of the numbers limited. Maybe there should be a section in the manual / guide discussing the pros and cons of using multi-currency accounts for expenses and income. I doubt that a lot of people are aware of the associated problems. Thoughts? Patrick Poendl Am Fr., 21. Okt. 2022 um 04:45 Uhr schrieb <gnucash-user-requ...@gnucash.org >: > ---------- Forwarded message ---------- > From: Jim DeLaHunt <list+gnuc...@jdlh.com> > To: gnucash-user@gnucash.org > Cc: > Bcc: > Date: Thu, 20 Oct 2022 19:43:32 -0700 > Subject: Re: [GNC] Enhancement request: multi-currency accounts > Hello, Patrick, welcome to GnuCash! > > On 2022-10-20 09:28, Patrick Pöndl wrote: > > ... > > - BUT: For income and expense accounts, multi-currency accounts seem to > be > > a total disaster. Why? Because all PAST transactions on both income and > > expense accounts will be valued at the CURRENT exchange rates.... > > I think you are misunderstanding the original proposal. Look below in > the thread, to what Anton Tsyganenko wrote: > > On 2022-10-18 02:34, Anton Tsyganenko wrote: > > ...All accounts that user creates are "multi-currency", like > > placeholder accounts without any specific currency. Sub-accounts for > > each currency are created automatically, when the first operation in > > this currency in this account is made.... > > Thus, the "multi-currency" part is a placeholder. Transactions are not > recorded in the placeholder, they are recorded in "sub-accounts for each > currency". Once they are recorded in that currency, they are valued in > that currency. Relationship to other currencies is established by means > of trading accounts, which GnuCash already supports. > > As I read it, Anton is just proposing that GnuCash do automatically what > I do manually. I have transactions denominated in CAD, USD, EUR, and > various stocks and funds in my book today. > > What is the base-currency value of a book with transactions denominated > in various currencies? That is a separate question to the proposal for > "multi-currency accounts". It is already an issue for books like mine. > For some GnuCash users, accounting regulations will determine how they > calculate base-currency value. For others, it can be whatever meets the > information needs of the user. > > > ...Therefore, my current conclusion is that for all transaction that > involve > > income or expense accounts, the amount has to be converted into the base > > currency using the exchange rate on the day the transaction occurred, or > at > > least closely.... > > OK, that is one way to deal with transactions in multiple currencies. It > is not what I am required to do for tracking capital gains in US stocks > when I report to Canadian authorities, or Canadian stocks when I report > to US authorities. > > Or, are you saying that GnuCash should only allow me to record > transactions in my base currency, not in any foreign currency? That > would be a big inconvenience for my usage. > > Best regards, > —Jim DeLaHunt > > _______________________________________________ > > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
