Foreign currency exchange rate settings

[Maf. King]

On Monday 11 September 2006 13:43, Adam Funk wrote:

> 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?
>

FWIW, I do exactly what you describe above when buying goods abroad on credit 
card. (mostly vacations these days, but in the past for business expenses 
too)  

I tend to not monitor cash too closely, and just have a transaction like:
Bank:Current: (Bought some EUR):  -202.00
Expense:FinanceCharge: +2.00
Expense:Holiday: +200 (GBP)

Then later on, there may be some currency left over after the trip, which I 
handle as a "negative expense": eg.
Bank:Current: (Left over EUR): +25.00
Expense:Holiday: -25.00  (GBP)

I figure that the only time the exchange rate counts is at the point the 
transaction takes place - for cash, it is when you exchange the money (_not_ 
when you actually buy goods), but on a credit card, it will be at some random 
time after you have bought the goods, when all the involved banks etc. have 
done whatever they need to... Estimating and then correcting card 
transactions seems to me to be the easiest way to keep track of how big the 
card bill will eventually be. 

HTH,
Maf.