On 10/20/2022 12:21 PM, Patrick Pöndl wrote:
I am a new GnuCash user and currently busy setting everything up. I have
done a lot of thinking and testing on the multi-currency issue in order to
hopefully get it right from the start.
So far my conclusion is this - and please, more experienced users, correct
me if there is a flaw in my thinking:
- For asset and liability accounts, multi-currency accounts make obviously
a lot of sense if you hold assets and liabilities denominated in multiple
currencies. Changes in value in respect to your base currency are perfectly
taken care of by using the automatic trading accounts.
- 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.
THAT is the major issue with trying to keep multiple currencies in the
same set of books. WHEN is to be the time of evaluation (of one to the
other in terms of exchange rates). This can even be an issue for
accounts of type asset and liability for those who are rarely moving
amounts between currencies << who have accounts in both places, who have
income and expenses in both places --- say who live/work in one country
part of the year and in another the rest of the year >>
Since not applying to me, I have never investigated the rules of the
various jurisdictions. You have income in country B but your primary tax
country is A. What does A say about when "conversion" takes place (when
evaluated for income in B, taxes paid in B for which A might give
credit, etc.) OR if A allows you to choose the date (say the end of the
reporting year) how do you do that unless separate books? << since you
would NOT want evaluations to have been taking place as you went along >>
Michael D Novack
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