Working with multiple currencies

Henry Bremridge henry.bremridge at
Wed Oct 4 12:26:12 EDT 2006

On Wed, Oct 04, 2006 at 03:06:51PM +0300, Manousaridis Angelos wrote:
> On Wed, Oct 04, 2006 at 01:24:40PM +0300, Ivars Grinbergs wrote:
> > I'm newbe to GC and accounting, so I might be wrong.
> > 
> > But I think, there should be only one account for expenses in your
> > base currency. When you enter currency expenditure split/transaction
> > (from currency account register window), you cerdit
> > asset/cash/currency account by currency amount, debit expenses
> > account by the same amount and while on debit split, enter currency
> > exchange rate for that particular transaction.
> > 
> > This way your expenses will not fluctuate due to exchange rate
> > fluctuations.
> My base currency is Euro. So does this mean that I should't have
> expenses accounts in other currencies?
Also a newbie and have not yet attempted to start multicurrency but
under the International Accounting Standards 21 the ruling for company
accounts seems to be quite clear (at least to start with....):

-   A foreign currency transaction should be recorded initially at the
    rate of exchange at the date of the transaction (use of averages is
    permitted if they are a reasonable approximation of actual). [IAS

-   At each subsequent balance sheet date: [IAS 21.23]

    -   Foreign currency monetary amounts should be reported using the
        closing rate.
    -   Non-monetary items carried at historical cost should be
        reported using the exchange rate at the date of the
    -   Non-monetary items carried at fair value should be
        reported at the rate that existed when the fair values
        were determined. 

    This is an extract from a much longer document, I copied it from (a Deloitte's web site)

Wed Oct  4 17:24:59 BST 2006
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