Stocks and Balancing Accounts

[Daniel Carrera]

Charles Day wrote:
> Assuming the report is correct, I suspect that you must have put the 
> books out of balance somewhere by forgetting to put in the capital gains 
> or loss on a sale of securities or foreign currency. I don't know any 
> other way to put GnuCash out of balance.

See http://www.mscs.dal.ca/~selinger/accounting/tutorial.html#2. section 
2.2 for an example.

You suggest I enter cap gains by hand. Look at section 2.2 above and 
you'll see that you cannot make the yellow lines fit by adding cap gains 
other than in the most simplistic cases.


> Perhaps you imported a sale?

No. I did not import a sale.


> Do you have any prices in the price editor?

Yes. I have many prices in the price editor.

> There are a number of different methods for calculating capital gains 
> (average cost, FIFO, LIFO, specific lots, etc.)  I use whichever method 
> creates the smallest tax liability.

GnuCash should do this, or at least not tell me that my books are out of 
balance. I don't ask for a full cap gains feature. I just want GnuCash 
to handle currency changes so that the transactions balance.

>     In a similar way, this system is unfeasible for multiple currencies.
>     I have money in CAD, USD, GBP and EUR. I have made many transactions
>     in all four currencies.
> 
> That may be why your books are out of balance.

That's what I say. And my money-management program should not go out of 
balance just because I have to use many currencies.


> Unfortunately, GnuCash is not very helpful in this area.  As an 
> alternative method to what you have already seen, you could take a look 
> at this: http://www.mscs.dal.ca/~selinger/accounting/tutorial.html

There it is! What GnuCash does is what it says in section 2.2. "Double 
entry foreign currency accounting, the wrong way". And the reason 
GnuCash doesn't balance is the same reason why 2.2. doesn't balance.

What GnuCash could do is use the method in section 3.2 (SSAP 20). Notice 
that this method is not feasible for a user (see "disadvantages") but 
GnuCash could do it.

The method that I currently use (with my "Currency > XYZ" accounts) is 
the method described in section 4. Or in particular, the one on this page:

http://www.mscs.dal.ca/~selinger/accounting/gnucash.html


You see, I already had this discussion about currencies a year ago on 
this list. Someone (maybe you) pointed me to that same accounting 
tutorial and I implemented the solution in section 4 because GnuCash 
does not support the method in section 3.2. This takes us full circle to 
my initial email. Today, a year later, I want to start buying stocks. To 
continue using my current method (section 4) would be cumbersome and I 
was hoping that there would be a better alternative. I guess there isn't.


Daniel.