Foreign xchange imbalance in reports

Manuel Del Moral migiwaza at gmail.com
Tue Jun 1 15:35:00 EDT 2010


    Hi, folks:
I have taken a lot of documentation to know which of the three methods
of computing foreign currencies is adequate when dealing with several
currencies, these are: weighted average, most recent, nearest in time.

So far, I have read many comments, but mostly oriented to match stocks
and other market instruments. I have also read the interesting article
about GNUCash currencies management in:
http://www.mscs.dal.ca/~selinger/accounting/gnucash.html 
and I admit that I'm suffering the jitter exposed in such article.

Ok, so going to the problem: my monthly "Income Statement" is giving me
deeply different results depending on the above three methods selected
to account for currencies.
I have built an Xcel file to try to guess the GNUCash behavior on the
three sceneries, and the only result I have collected is the following:

*Weighted Average* 
It takes an unknown average, as many of the operations were already in
foreign currencies before performing purchases. So there is not a direct
xchange operation to account for. Example: I transferred.
Monthly Net Loss: 43.33 €

*Most Recent* 
It has not taken a last operation price in price editor, but another
one, that is slightly similar. The weird is that is has applied the same
rate for ALL purchases along the month. It should take different rates,
as it has moved along the month.
Monthly Net Loss: 67.49

*Nearest in Time*
Correct: It takes the last price in price editor.
Monthly Net Loss: 11.78

Well, differences are really high. With that mess in my head, I would
appreciate that someone could kindly explain more about what holy method
should fit better for these reports.

Thanks,

Manuel.


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