Invoices, foreign currency and profits calculation

[Derek Atkins]

Mike Alexander <mta at umich.edu> writes:

> --On April 19, 2007 4:18:40 PM +0800 Wouter van Marle 
> <wouter at squirrel-systems.com> wrote:
>
>> 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.
>
> GnuCash, even version 2.0, doesn't handle multiple currencies as well 
> as it should.  See 
> <http://www.mathstat.dal.ca/~selinger/accounting/tutorial.html> for an 
> explanation of one way to handle this properly and 
> <http://www.mathstat.dal.ca/~selinger/accounting/gnucash.html> for 
> hints about how GnuCash could work better.  I've been working on 
> changes along these lines, but it's not clear they will be accepted. 
> They certainly won't go into any version before 2.1.

The business features are even worse.. They specifically only
handle single-currency transactions..   But they aren't good
about enforcing that.  Even if we decided to accept your
"trading account" proposal (which I'm still not sure I like as-is),
it wouldn't help here.

-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