Book-currency feature and cost accounting

[John Ralls]

On Oct 11, 2014, at 11:45 AM, Alex Aycinena <alex.aycinena at gmail.com> wrote:

> John,
> 
> 
> 
> On Fri, Oct 10, 2014 at 7:40 PM, John Ralls <jralls at ceridwen.us> wrote:
> 
> [snip]
> 
> 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
> 
> My thinking is that, if you tracked cash-in-wallet, and had one in JPY in this example, if the expense accounts were in USD, then the system would calculate the cost in USD of the JPY spent (since it is tracking lots and would use the user-selected costing policy, LIFO, FIFO, etc.) and that would be the amount in the USD expense split. Therefore there would be no gain/loss split and no extra work for the user (but the user could elect to override the default if they wished to do so, in which case there could be a gain/loss).

Alex,

OK. That brings up something else for your “to-do” list: Only FIFO is implemented. Technichal nit, it’s a “pricing” policy, not a “costing” one. 

BTW, I was a bit slow to notice this: Your subject says “cost  accounting”, but that’s a different animal altogether: http://en.wikipedia.org/wiki/Cost_accounting . Not at all what you’re talking about here.

Regards,
John Ralls