Foreign currency exchange rate settings
Adam Funk
a24061 at yahoo.com
Mon Sep 11 08:43:08 EDT 2006
On 2006-09-10, Derek Atkins <warlord at MIT.EDU> wrote:
> 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!
I was recently thinking about this as part of my preparation for using
GnuCash, and I had been planning to handle foreign credit card
transactions as follows:
1. Suppose I order EUR50 from amazon.fr, using a credit card that's
billed in GBP (which is also my main currency).
2. Enter a transaction in that credit card's register with "EUR50" in
the description or memo with an estimated GPB amount (say GBP33)
debited to the credit card and credited to Expenses:Books (which is
also denominated in GBP). All the accounts are close to what will
be their correct values.
3. When I check the bill on-line or get the statement, I see that I've
been charged GBP34.08, so I amend both halves of the transaction to
that number. Now the credit card register will be exactly
reconcilable with my statement, and Expenses:Books will be correct.
This doesn't involve 'Edit Exchange Rate' at all, and the EUR amount
is in the memo or description if I need to refer to it later. To me
this approach seems straightforward. Is it wrong?
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