Unrealized gains

[Charles Day]

I have attached a couple of examples of how messy it can become in the
current version of GnuCash when you sell currency or investments for a gain
and keep the books in balance.

The first file, 2eur, is an example of currency gains. The "home" currency
is USD and there is a bank account named "USD Bank" that starts with $1400.
$700 is converted to Euros and transferred to "EUR Bank". The remaining $700
is also converted to Euros and transferred to "EUR Cash". What happens if
the exchange rate changes slightly, and we spend some of that Euro cash to
buy a nice dinner? It turns out that to keep the books in balance, I had to
enter quite a complicated transaction involving a complete revaluation of
all Euros held, regardless of which account they are held in.  That
transaction was tough to key in, too, as I had to fight with the register,
and on some of the splits the exchange rate had to be zero!  (I wonder if
this might cause a divide-by-zero crash at some point.) If any of these
splits are removed, the trial balance will fail. Imagine the nightmare if I
had Euros in asset accounts instead of just two.

Just in case I did this the really hard way, if anyone has a suggestion on
how to enter this transaction more easily and without changing the currency
that each account is denominated in, please let me know. Of course, there
would have been no need to calculate any gains if Expense:Dining was
denominated in EUR instead of USD, but that assumes that you are happy to
manage separate expense accounts for each currency you use.

The second file, 2brokers, is an example of accounting for investment gains.
Stock in XYZ corporation has been purchased in two separate broker accounts.
At one broker, a few of the shares are then sold for a profit. To keep the
books in balance, the sell transaction needed 8 splits. Again, take a look
at the trial balance. Remove any of those splits and the books become
unbalanced.

In both these examples, if trading accounts had been used there would be no
need to calculate unrealized gains, as that would happen automatically.
Putting in the realized gain would just be a transfer from the unrealized
gains account to the realized gains account (essentially just reclassifying
some of the unrealized gain as realized, which also avoids doing your own
subtraction).

Cheers,
Charles
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