Hi,
On Sun, January 5, 2025 9:45 am, Tian Kevin wrote:
> Thank you for your response. I would like to provide additional context
> regarding the importance of supporting functional currency amounts in
> transactions.
>
> 1.
> Compliance with Accounting Standards
> Financial accounting must adhere to established accounting standards such
> as IFRS, which require functional currency financial statements. At the
> end of each month, accountants need to calculate exchange gains or losses
> based on currency fluctuations. Without native support for functional
> currency amounts in GnuCash, this process becomes more labor-intensive and
> prone to errors.
> ��IAS 21 The Effects of Changes in Foreign Exchange Rates��
> 21 A foreign currency transaction shall be recorded, on initial
> recognition in the functional currency, by applying to the foreign
> currency amount the spot exchange rate between the functional currency and
> the foreign currency at the date of the transaction.
You will note that this does not specify that you need to record the
"functional currency amount" but rather the "spot exchange rate". This is
absolutely doable in GnuCash today without any additional columns, by
using the existing PriceDB. We would just need to add logic to ask for
the rate back to the functional (book?) currency on transactions that
don't already touch that currency. Then you use the PriceDB
closest-in-time to compute the value in the book currency at the time of
transaction, and then again at the time of reporting, to determine the
unrealized gain/loss due to the commodity price fluctuation.
Keep in mind that the vast majority of transactions are within the home
currency, so adding a column is just wasted space most of the time. I
think that was also another reason it was removed from GnuCash 20+ years
ago.
>
> 2.
> Comparison with Other Financial Software
GnuCash is a personal and small-business accounting system. Manager.io
and NetSuite are (I believe) geared towards much larger organizations.
[snip]
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-derek
--
Derek Atkins 617-623-3745
de...@ihtfp.com www.ihtfp.com
Computer and Internet Security Consultant
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