Book-currency feature and cost accounting

[Herbert Thoma]

Am 28.10.2014 17:32, schrieb John Ralls:
>
>> On Oct 28, 2014, at 7:11 AM, Wm <wm+gnc at tarrcity.demon.co.uk> wrote:
>>
>> Tue, 21 Oct 2014 16:25:55 <2234422.7n09t1OOsf at legolas.kobaltwit.lan> Geert Janssens <geert.gnucash at kobaltwit.be>
>>
>>> On Thursday 09 October 2014 14:30:28 Alex Aycinena wrote:
>>>> Developers,
>>>>
>>>> I am planning to add a feature to gnucash, primarily, but not
>>>> exclusively, related to currency accounting, and wanted to summarize
>>>> what I was thinking of. I would welcome feedback.
>>>>
>>>> Since version 2.4.0, GnuCash supports trading accounts as described in
>>>> 'Tutorial on multiple currency accounting' and 'Multiple currency
>>>> accounting in GnuCash' by P. Selinger (see
>>>> http://wiki.gnucash.org/wiki/Trading_Accounts). I believe Mike
>>>> Alexander added this feature.
>>>>
>>>> In his tutorial, he (P. Selinger) mentions a 'reference currency
>>>> method' as an alternative to the use of trading accounts. This is
>>>> essentially the feature I wish to add.
>>>>
>>>> Today, in file->properties->Accounts tab, you can turn "trading
>>>> accounts" on or off. I propose to change this to a selection of three
>>>> alternatives: use trading accounts, specify a 'book currency', or
>>>> neither trading accounts nor book currency. If trading accounts is
>>>> selected, it would work as implemented by Mike. If neither is
>>>> selected, it would work as gnucash does now without trading accounts
>>>> selected. So no one would be forced to use the new feature.
>>>>
>>> What benefit does the current situation (without trading accounts) have on its own compared
>>> to your new proposal ?
>>
>> That is part of what puzzles me, why would anyone, first moment that they encounter anything that isn't HomeCurrency or HomeUnit *not* turn on Trading accounts.  Shouldn't GnuCash be doing it *for* people when they
>>   buy shares,
>>   invest in a pension plan and
>>   other ordinary life stuff or
>>   even exchange some Euros for a family holiday just for the joy of currency or a
>>   teenager doing something on-line in a new-currency, etc (not my idea of fun but it happens and should be recorded).
>>
>>> In other words should we really keep the old way or can it be modeled
>>> in your new proposal as well by for example assuming a default currency ?
>>
>> I'm wondering if the formalisation of a book-currency isn't seen by some as governmental rather than natural accounting.  I'm in URP flox
>>
>>> Or a related question: how hard would it be to migrate an existing multi-currency book without
>>> trading accounts to your proposal ?
>>
>> That is something that interests me too.  I am running a book (I don't like that term, it sounds like gambling, but I'll use it) for a relative as well as myself, we know how much we owe each other by common agreement.   I think it would be quite difficult without Trading accounts, coz GnuCash doesn't do bunches of currency or shares naturally.
>
> I've run a pretty sizable investment portfolio in GnuCash for many years with no need for trading accounts.

Me too.

> Trading accounts aren't really necessary for non-currency transactions because the stock and fund account registers display amount, price, and value. Trading accounts are most useful, though not required, for users who maintain accounts in different currencies because currency accounts registers display only amount.

I largely agree. I live in Germany, so my currency is the Euro. Even if I buy or sell
stock that trades in USD or an other currency, in the end there will be a debit or credit
to my EUR bank account. There is an intermediate amount in USD, but frankly I don't care
about that. What matters is the EUR amount, even for the tax declaration (I track only
my private finances, it may be different for companies, I don't know).

If I travel abroad, I do most payments with a credit card. There as well I get a final
amount in EUR. I don't care about the amount in foreign currency, again. If I get
foreign cash, I note this as an expense (say I get 200 USD at an ATM, this will be
recorded as Description: 200 USD, 156 EUR expense). I do not track the USD cash
any further, I am just to lazy to do that. These are usually only small amounts,
so I don't care.

My bank offers accounts in foreign currencies. There I would need trading accounts,
but I never did this so far.

> URP flox?
>
> The way GnuCash does lots (the formal name for "bunches of currency or shares") requires that one manually initiate it, which is a good thing because it doesn't work very well. In my view the best feature of Alex's proposal is that he'll have to fix that first.

Yes, if lot handling would be easier, this would be highly desirable.

  Herbert.

> Regards,
> John Ralls
>
>
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-- 
Herbert Thoma
Dipl.-Ing., MBA
Head of Video Group
Multimedia Applications Department
Fraunhofer IIS
Am Wolfsmantel 33, 91058 Erlangen, Germany
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Fax:   +49-9131-776-6099
email: herbert.thoma at iis.fraunhofer.de
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