Pretty insightful for a newbie with no accounting background. An excruciatingly detailed discussion of this topic can be found at https://bugs.gnucash.org/show_bug.cgi?id=797796. One of the participants, CDB-Man, is a Canadian accountant. While the details of the discussion center around a few transactions in a CAD book involving a USD brokerage account holding a US ETF, SPY, the general principles illustrated are widely applicable to multi-currency accounting.
Regards, John Ralls > On Oct 21, 2022, at 5:49 AM, Patrick Pöndl <patr...@poendl.de> wrote: > > I guess it always depends on what you want to accomplish. If you are bound > by certain rules in your jurisdiction for tax purposes, you need to think > how to set up your accounts in GnuCash to obey those rules. If you are > bound by more than one jurisdiction with incompatible rules, maybe you even > need to keep track of the same transactions in two separate set of books in > order to stay sane. > > I was just under the impression that the original poster who suggested that > GnuCash should automatically create multi-currency subaccounts for each > expense account was simply suggesting this in order to save time and > effort, but was not aware what that would do to the quality of the data the > more exchange rates change over time: ever larger balances on the trading > accounts (which tend to eliminate meaning from the numbers) and ever > smaller balances on the expense and income accounts in terms of the base > currency (which do give meaning to the numbers). > > I guess one approach for people who don't want to (or can't for regulatory > purposes) convert to base currency for every single transaction would 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. > > But as I said, I'm a newbie at GnuCash, and I don't have an accounting > background. I just realized that this problem exists while planning my own > initial setup of GnuCash, and I still hope that someone more experienced > shares a method that both minimizes work and the described problem. > > Patrick Poendl > > Am Fr., 21. Okt. 2022 um 04:45 Uhr schrieb <gnucash-user-requ...@gnucash.org >> : > >> >> ---------- Forwarded message ---------- >> From: Michael or Penny Novack <stepbystepf...@comcast.net> >> To: gnucash-user@gnucash.org >> Cc: >> Bcc: >> Date: Thu, 20 Oct 2022 17:59:20 -0400 >> Subject: Re: [GNC] gnucash-user Digest, Vol 235, Issue 46 >> On 10/20/2022 12:21 PM, Patrick Pöndl wrote: >> >> 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 >> >> >> > _______________________________________________ > 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.
