[GNC] International Currency Transactions? [was: Re: gnucash-user Digest, Vol 250, Issue 4]

[Jim DeLaHunt]

Hello, Eric:

Glad that the first reply helped you get started.

(By the way, when you read the list as a digest, and you want to reply, 
please change the Subject: line of your reply from the generic digest 
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On 2024-01-05 06:31, Eric H. Bowen via gnucash-user wrote:
> …What I don't see is how to account for a purchase of books in the 
> United Kingdom, with an invoice denominated in GBP, which will be 
> settled up by an international debit card payment from a bank in the 
> USA at whatever exchange rate VISA is currently charging.…

I do this sort of transaction all the time.

You have the choice of tracking such expenses in the sale currency, or 
in your purchase currency. I do both. There are some currencies that I 
use often enough that I have a parallel set of Expense accounts 
denominated in those currencies. There are others that I use rarely, so 
I track the expense in the purchase currency.

This is my procedure, when I track in the sale currency:

 1. Create Expense accounts denominated in the currencies which you want
    to track.  For instance, if you want to track your GBP purchase of
    books in GBP terms, create an account Expenses:"Pounds Book
    Purchase" which has the account currency set to "GBP".
 2. Start the transaction in the register of the account that pays for
    the purchase. In your example, that will be the register for the USA
    debit card. Why? Because each transaction has a hidden base
    currency, and all splits on other currencies will be converted to
    this base currency. GnuCash sets the transaction's base currency to
    the currency of the account from which you create the transaction.
    It is more straightforward for that base currency to match the
    payment currency, rather than, say, the Expense:Pounds Book Purchase
    account currency.
 3. Begin entering the transaction as normal. Fill in Date, Description,
    Notes as you normally would.
 4. Fill in the Transfer Account field with the name of the Expense
    account of the currency you want to track. In this example, you use
    Expenses:"Pounds Book Purchase".
 5. In the Charge field, fill in the purchase amount /in the purchase
    currency/. You will need to find out from your bank what exchange
    rate VISA charged, and therefore what the purchase amount was,
    before you can enter this.
 6. Before you can save the transaction, GnuCash will display a Transfer
    Funds dialogue.  At the top, under "Basic Information", it will
    display the purchase amount which you entered. At the bottom, under
    "Currency Transfer", it will let you enter the sale amount, in the
    sale currency (which will be the currency of the account you put
    into the Transfer Account field).

> …I've set up a "sandbox" file with a currencies Price List and I've 
> attempted to change the "Purchase Information" of the vendor on the 
> bill to GBP, but the program locks up when I attempt to post it to 
> Accounts Payable. I've tried creating a GBP-denominated Accounts 
> Payable sub-account, but GnuCash apparently doesn't like that one bit 
> either.…

Good for your for setting up the "sandbox" file. That will help you 
figure things out.

You mention "vendor" and "bill" and "Accounts Payable". That says to me 
that you are using the Business features to handle this transaction. I'm 
afraid I can't help you with the Business features for tracking 
purchases and expenses, because I don't use them.

Also, I have Trading Accounts enabled. I don't have experience in how 
GnuCash behaves without them.

>
> …I'm at the start of what will hopefully be a long-term undertaking, 
> and I want to set off on the right foot. 

I think you are off to a good start, and are asking good questions. I 
look forward to hearing what works out for you. I am confident that you 
will help other future GnuCash users.

Best regards,
      —Jim DeLaHunt