Thanks for taking the time to think about it John!! I appreciate it :)

On 2025-09-07, John Wiegley wrote:
>>>>>> "TO" == Tavis Ormandy <[email protected]> writes:
>
>TO> $ ledger --file test.ldg bal --lots ^Assets:Bank
>TO>       $-5.00
>TO>     $135.00 {£0.74074074} [04-Sep-2025]  Assets:Bank
>
> Hmm… interesting question. Parts of the idea behind --lots is that you can use
> --lot-notes if you only want the notes, or --lot-dates, etc. If you don’t care
> about lot data, you shouldn’t need to see it. It IS, however, a fact that you
> exchanged assets at a cost basis, which could have tax implications, etc. So
> Ledger just tracks all the data, and leaves it up to you to craft the report
> you want.
>

Yes agreed, but when you swap $ for € at the airport on vacation, it feels
like there should be a way to encode what you're doing.

I just looked up the tax rules, in the UK the rule is:

> A gain on the disposal of foreign currency acquired by an
> individual for the personal expenditure outside the United Kingdom of
> themselves and their family or dependents is not a chargeable gain

The rules are similar in the US, except there is a cap of $200 gain per
transaction before it's reportable.

I think this matches how people intuitively treat currency conversion:
unless you're a forex trader, it's not a commodity sale.

> Mainly lots are being recorded so that when you convert back, it can
> auto-generate a capital gain/loss transaction for you. But if you *never* want
> that, I’m not quite sure what Ledger should do. This is the most basic form of
> “I don’t track costs”:
>
>  2025/09/04 * Convert Currency
>      Assets:Bank                            £100.00
>      Assets:Bank                           -$135.00
>

Hmm, but this will implicitly create lots too, no? This seems
funtionally identical to £100 @@ $135.

> But it sounds like what you want is for one quantity to “transform” into the
> other, without recording the details of the transformation.

I don't know. When you sell a share of APPL stock, you don't record
that the $10 you receive from your broker came from that sale -- it's
the same as every dollar.

Why when you sell $1 for a £1 is that different?

I think the answer is that fungible currencies are special here, the tax
code recognizes this with special treatment, and people consider them
different to commodities.

I'm not a finance guy, maybe I don't have the right language to articulate this 
:)

> The main problem
> here is that this will allow assets to “come into being from the aether” if
> the value of pounds goes up and you transfer back to the tune of $145… This is
> never allowed by double-entry, and would need a balancing transaction from
> Equity to be lawful, hence the hledger approach…
>
> John
>

Not sure this is true... isn't the hledger approach worse? It just
stuffs them into a hidden account so you can't see them... it just hides
the messy problem under a rug :)

Tavis.


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