Foreign currency exchange rate settings

[Derek Atkins]

Adam Funk <a24061 at yahoo.com> writes:

> 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?

This approach would certainly work when you're buying goods..  But
it doesn't work when you're actually buying the currency.

-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