Unrealized gains: conclusions?

[Charles Day]

Now that we have all had a chance to chew on the recent unrealized gains
discussions, I wonder if we might be able to come to some conclusions. Here
is my list for your comments and/or additions.

1. During reporting, translation into the reporting currency can introduce
unrealized gains. The GnuCash reporting system is intended to automatically
calculate and report these gains.

2. Several fundamental GnuCash reports do not calculate unrealized gains
correctly. For example:
-Balance sheet: correctly figures unrealized gains on assets, but doesn't do
the same for liabilities
-Trial Balance: incorrectly figures unrealized gains (I don't quite
understand why unrealized gains and a choice of "price source" are desirable
for this report anyway.)
-Equity Statement: incorrectly figures unrealized gains, and also does not
figure unrealized gains at period start

3. GnuCash does not force the user to record realized gains.

4. Without trading accounts, if the user forgets to record realized gains
then they will either:
 (a) be mixed in with unrealized gains on reports, or
 (b) put the books out of balance. (This only happens when all holdings of
the commodity whose sale created realized gains have been sold.)

5. With trading accounts (as defined by Peter Selinger), if the user forgets
to record realized gains then they will become mixed in with unrealized
gains. However, the books will not fall out of balance.

6. With trading accounts, reports have no need to calculate unrealized
gains.

7. Using trading accounts allows unrealized gains to be categorized by
source. Reports currently only show all unrealized gains as a lump sum.

8. Trading accounts should use account type Equity, not Income. (I'm
changing my mind and now agree with Derek.) This is because unrealized gains
should not be included in Retained Earnings in the balance sheet, but rather
displayed as a separate line in the Equity section. This may be a personal
choice thing though... if you really consider unrealized gains to be current
income then there is nothing to stop you from using an Income account
instead. The math is the same, so the choice only really only determines how
unrealized gains get reported.

-Charles