Accounting transaction to realize currency gain as income in the period? |WAS >> Re: Understanding the Balance Sheet - Unrealized Gain?

[bunk3m]

On 25.03.2013 12:19 , Derek Atkins wrote:
> bunk3m <bunk3m at gmail.com> writes:
>
>> Hi all.
>>
>> I think I understand the unrealized gain now ... sort of. 
>>
>> So how does one go about doing the double accounting entry to realize
>> the gain as income in the period? 
> you don't -- it's unrealized.  It's not income until you realize the
> gain by "selling" (trading) the asset.
>
>> If I can't easily find the transactions that make up the unrealized
>> gain/loss, I would need to do a clearing entry of the aggregate
>> somehow.   So I can create half of the transaction by creating a revenue
>> item called Currency Gain/Loss.  But what would the other side of that
>> transaction be? 
>>
>> I'm not an accountant so perhaps this is intuitively obvious for the
>> accounting folks. 
>>
>> I suspect this is something to do with the currency asset value but I
>> got rid of all the last of the foreign currency and now have a zero
>> balance in that account. 
> Did you account for the gain/loss when you traded those foreign-currency
> assets?
>
Nope.  I didn't know to do so.  My bad.  Is this written up or explained
somewhere?  I must have missed this in the docs.

I remember reading a website showing currency transactions but I didn't
bookmark and can't find it anymore.  But I think it was more about how
currency transactions were supposed to occur in gnuCash.  I ignored
after reading because subsequent versions fixed whatever issue was outlined.

My transactions were pretty easy .... I think.  I received some income
in foreign currency, deposited into a foreign currency bank account;
paid monthly bank fees in the foreign currency (transfer to Expense:Bank
Fees); and, made a few transfers of foreign currency to current local
currency account using transfer.  Then, closed the foreign currency
account.  The largest volume of transactions is the bank fees.

So now I have those unrealized gains on the balance sheet and am trying
to figure out how to fix my mistakes. :-( I suspect I'll have to do some
more reading or borrow a book from the library on foreign currency
accounting if such a beast exists.

Damn!  My head is spinning with all this stuff.

Thanks again for your help, Derek.

B.

>> Thanks again for everyone's help.
>>
>> Cheers!
>> B.
> -derek
>
>> On 22.03.2013 10:42 , Derek Atkins wrote:
>>> Nope, the Unrealized Gain is literally a change-in-value of an asset
>>> due to a change in price (exchange rate).
>>> -derek