Invoices, foreign currency and profits calculation

[Wouter van Marle]

Hi list,

I just ran into an interesting issue.

I'm accounting in GnuCash in HKD (local currency), but invoices and
bills are often in USD and some in EUR.

The issue at hand:
I get a bill in EUR, and enter this in GnuCash. The HKD value is
calculated for that date if available (I use the "nearest in time"
option - don't have the quotes of every single day), and based on that
my profit is calculated.

Now by the time this invoice is paid, the exchange rate has changed, and
the actual gross profit in HKD is less than it used to be.

Example:
on 1/4 I enter an invoice of EUR 25,000, @10.0, so $250,000.
The material is sold the same day at say $265,000.
Gross profit: $15,000.

On 1/4 I also made a partial payment for this bill, of say EUR 5000,
equivalent to $50,000.

On 1/5 the time has come to make full payment for this bill; but now the
EUR is @11.0, and I have to pay $220,000 for the rest payment. The total
amount payed is now $270,000.

I noticed that in the profit/loss accounts this is not taken into
consideration. I will have to take this into account one way or another
as it does change my actual profit!

Due to the way GnuCash works, I make a EUR payment to a virtual EUR bank
account, and then make a separate EUR/HKD transfer with of course the
current exchange rate. I've found before it to be impossible to pay a
EUR bill straight from a HKD bank account.

This all is using GnuCash 1.8.11.

Since last year I'm going to upgrade to 2.x "real soon"... but actually
it still works :)

Wouter.