Multi-currency advice

[Jeff Carneal]

On Feb 10, 2007, at 5:19 AM, Cory Helfrich wrote:


> I have been using gnucash for a couple of weeks now. I really like
> the software as I find it much better than Quicken.
>

Amen, brother.

> expenses are paid in cash in two different currencies. What is the
> best way to represent this is gnucash? I presently have accounts
> Expense:Food:Groceries (with currency CAD),
> Expense:Food:Groceries:Curr2 and Expense:Food:Groceries:Curr3. This
> makes data entry (and import from Quicken) simple (no exchange rate
> for every transaction), but the totals from the Curr2 and Curr3
> accounts are rolled up at the present exchange rate, which is not
> really correct. Note that this is the way Quicken handles these
> expenses. Also, this method greatly increases the number of accounts
> within gnucash. The expenses should really be rolled up at the
> exchange rate that I paid for the Curr2 and Curr3 cash, correct? Can
> anyone give me some advice as the the best way to set up my chart of
> accounts?
>

Ok, full disclosure, I'm new to gnucash, too, so if I say something  
wrong I expect the legion of veterans to come in quickly to clean up  
my mess.

Regarding your first question of accounts "roll[ing] up at the  
present exchange rate", do you mean you'd rather have each  
transaction entered at its x-rate at the time of entry?  I'm not sure  
I understand your question.

As for your account hierarchy, my understanding from looking at the  
gnucash data file is one account -> one commodity (where commodity  
here = currency).  Thus, the way you're setting it up sounds right...  
you want one account for your grocery expense in CAD and one for it  
in USD.  As for organizing that, I'd say you have many different  
methods but two stick out in my mind depending on what your goal is:

Method 1:

Expenses:Groceries:CAD
Expenses:Electricity:CAD
Expenses:Groceries:USD
Expenses:Electricity:USD

Method 2:

Expenses:CAD:Groceries
Expenses:CAD:Electricity
Expenses:USD:Groceries
Expenses:USD:Electricity

Method 1 will quickly and easily show you your total grocery expense  
at the level of Expenses:Groceries.  Method 2 will show your total  
CAD and USD expenses at the top level of the Expenses hierarchy.   
Just depends on what you want...

HTH

Jeff