weighted averages and balance sheet in multiple currencies

[Derek Atkins]

The balance sheet is KNOWN not to cope with capital gains/losses
to buying/selling currencies and securities.  See bug #91661

Feel free to submit a patch to fix the problem.

-derek

Roger Keays <r.keays at ninthave.net> writes:

> 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
>
> -- 
> -------------------------------------------------------------
> ninth ave                                  p: +61 7 3870 8494
>                                             f: +61 7 3870 8491
>        _       _       _                    m: +61 405 048 371
>     __(@)<  __(@)>  __(@),          w: http://www.ninthave.net
>     \___)   \___)   \___)              e: r.keays at ninthave.net
> -------------------------------------------------------------
>
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>
>

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available