Foreign Currency - Balance Sheet

[marshal@h9.dion.ne.jp]

Hi all,

I noticed the thread on foreige cuurrency, and I have a few things to
add to it that I've just encountered.

I maintain both Canadian and Japanese accounts since I moved to Japan,
but still have some loans and investments in Canada.  I'm using
GnuCash ver. 1.6 under Debian, so I've set up a JPY-CDN currency
account for when I send money back to Canada.

So when I sent money back, I use the exchange rate that I get when I
buy the money order.  

However, when you create a balance sheet, the balance sheet will use
the latest exchange rate that it gets from somewhere...  I'm not sure
where...  Anyways, because it's using a different exchange rate from
the one that was used when the transaction occurs, there will be some
difference, and your balance sheet doesn't balance.

E.g.

Loan account - liability
Sept 13, 2002 Opening balance  2000 CDN
Sept 13, 2002 Payment on loan  1000 CDN  1000 CDN

Cash - asset
Sept 13, 2002 Opening balance  200000 JPY
Sept 13, 2002 Payment on loan  100000 JPY  100000 JPY

Exchange rate on Sept 13, 2002 100JPY/1CDN

The books balance at this point because of the JPY-CDN account dealing
with all the exchanges rates.

Sept 14, 2002

exchange rate now 90JPY/1CDN

Make a balance sheet, in JPY.

Asset
Cash: 100000 JPY

Liability
Loan account:  1000CDN * 90JPY/CDN = 90000 JPY

DOH!  not balanced...

So, apparently (I am not an Accountant) what happens is that usually
an average of all the exchange rates used are taken and then that
exchange rate is used for the balance sheet.  Of course there will
still be descrepancies, and so there is just a "plug" account called
"Translation gains/losses" used to account for the difference.

Another way, I think (again IANAA), that could be used to solve this
problem, since we have to power of computer to deal with all the
menial work, is to calculate the balance sheet using the exchange rates
that was used on the days the transactions were incurred.  (Am I
making sense?)  That way the balance sheet will stay balance.  It
would more or less entail that all accounts have 2 values, one in each
currency.  

I haven't looked at the reporting languages yet, but would it be
possible to do one of the above?

If I'm not making any sense, please ask me to clarify...

Marshal