Foreign currency exchange rate settings

[Adam Funk]

On 2006-09-11, Derek Atkins <warlord at MIT.EDU> wrote:

>> 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..  

That's the only thing I meant!  So it's OK for that?

> But it doesn't work when you're actually buying the currency.

Of course not!  I'm planning to have an "Cash EUR" account in Assets,
so if I make an ATM withdrawal of EUR100 from my UK bank account, I
know I'll have to handle it "the complicated way".