Foreign currency exchange rate settings

[Derek Atkins]

Norbert Klein <nhklein at gmx.net> writes:

> I am new on the list, and fairly new to using GnuCash - 1.8.9 - and
> naturally I have a number of still unsolved problems. As I live in
> Cambodia and travel outside of the country from time to time, I do need
> different currencies - but I was not able to find a way which would
> avoid that for every multi-currency entry I make, I have to go to the
> Internet first and find the exchange rate. Probably there is somewhere a
> way to save it somewhere for repeated use (and adjust the rate only from
> time to time as it may be changing) - but I was not able to achieve this
> so far. Any advice would be very welcome.

The way to avoid it for EVERY transaction is to have, effectively,
multiple sets of accounts (one for each currency)..  So you have
effectively a Currency_N Asset Account and then a set of Currency_N
Income and Expense accounts.  So every time you're working
specifically in Currency N you use the Currency_N accounts.  When you
transfer between Currency_N and Currency_X, then you need the specific
exchange rate of that transaction.

The gnucash exchange rate dialog WILL remember the last exchange rate
you used (based on the transaction date) so it should offer you that
exchange rate first.  But yes, every multi-currency transaction MUST
have an exchange rate entered at the time the transaction is created.
That's because the exchange rate is a fundamental aspect of the
specific transaction.

For example, if I exchange US$100 for CA$120, there IS only a single
exchange rate for that transaction (1.2).  This rate is fundamental to
the transaction.  It's not something that I can lookup later and fill
in, because the transaction has no meaning without the exchange rate.

However, if someone hands me CA$120 and I keep that Canadian currency
in my hand, there's been no exchange of currencies, so technically I
should store that CA$120 in a CAD-based Asset Account (Cash, in this
case).

Note that there are exceptions to this.  For example a foreign
currency credit card transaction has an exchange rate that you
probably DO have to lookup later.  For example if I'm traveling to the
Japaen and spend ¥8500 on dinner and put in on my UD$ Credit Card, I
wont know the exchange rate until that charge is actually posted to my
account (or when I get my bill at the end of the month).  So in this
case I probably need to delay entering the transaction, or I need to
"guess" the rate and then adjust it later.  Note that adjusting it
later is a little more challenging, because gnucash really does try to
keep everything in balance, so you have to adjust both the exchange
rate AND the actual value in the register at the same time!

> Norbert

-derek

-- 
       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