weighted averages and balance sheet in multiple currencies

[Roger Keays]

Hi All,

First, thanks for the great software. I've been using GNUcash for over a year 
and love it!

My favourite feature of gnucash is how well it handles multiple currencies, 
except I've come across a problem when creating balance sheets with multiple 
currencies.

There is an example of my problem at http://www.ninthave.net/~roger/tmp/account 
: it is caused by GnuCash calculating the profit as:

    usd_weighted_average(all accounts) * (usd_income - usd_expense)

as opposed to

    usd_weighted_average(income accounts) * usd_income_ -
    usd_weighted_average(expense accounts) * usd_expense

I don't think the first calculation is incorrect for calculating the profit of a 
foreign currency, but I'm not sure if it is useful for a balance sheet, where 
equity & liabity should match assets regardless of the display currency.

Some solutions would be:

   * provide another Price Source in the options called 'Per Entry' which means 
that each currency conversion is done using the exchange rate specified in that 
transaction.

   * it would be possible to balance the balance sheet by closing all the 
foreign accounts like you would for an accounting period. To work though, each 
foreign account would have to be closed using the weighted average of 
transactions for that account (or that type of account if you're closing all 
accounts of that type). Calculating this by hand would be a bit difficult so 
perhaps a wizard could help us calculate the exchange rate when closing accounts?

Thoughts anyone?

Roger

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