Book-currency feature and cost accounting

[John Ralls]

On Oct 10, 2014, at 4:14 PM, Alex Aycinena <alex.aycinena at gmail.com> wrote:

> John,
> 
> On Thu, Oct 9, 2014 at 5:26 PM, John Ralls <jralls at ceridwen.us> wrote:
> 
> Alex,
> 
> How much clean-up/refactoring and C++ conversion are you willing to do in the process?
> 
> I am willing to do some when I spot an opportunity, or it is pointed out to me. May I consult you about this?

Of course.

[SNIP]

> Be careful with automatically invoking the lots facility: In the usual multi-currency transaction there is no potential for capital gain because the holding period of the “foreign” currency is 0. That case is making a purchase or sale of something in a foreign currency which is immediately converted to one’s home currency. Even when the user has long-term holdings of the “foreign” currency that *are* subject to capital gains and losses, those immediate transactions won’t and shouldn’t clutter up the database with 0-value cap gain splits.
> 
> 
> I agree with you here. If someone, for example, use their credit card in a foreign country (essentially 'buying' the foreign currency and then immediately spending it), then I don't think lots would be involved as long as both accounts are in the book-currency. If the user has a long-term holding in the "foreign" currency, and then spends it, the system would have a cost for that holding, and if the cost is used to value the spend, then there would be no capital gain/loss. If the uses wishes to value the spend at, say, the then current exchange rate, then the system has the data to calculate and show the resulting gain/loss and create the split to the account specified for the account (with the user option to override). 

Right. The credit card transaction in particular has the potential to ignore the "foreign" currency. I was thinking more of the people who track "cash in wallet". If I'm visiting
(my family says Japan is next) and get 10000JPY from the ATM I'd need a Cash and some Expense accounts in JPY to account for spending that cash. Since those transactions
wouldn't be in the book currency (USD in my case) I'd be presented with a Transfer dialog box for each, and might select a different exchange rate from the one used for the 
ATM withdrawal, inadvertently creating a wholly bogus cap gain/loss. That's all entirely hypothetical, I treat cash as an expense category and don't worry much about how
I spend it because in general I don't use it that much., but since "Cash in Wallet" is one of the accounts in the templates I'm sure there are others who do track it.

Regards,
John Ralls