Question about multiple currencies

[John M Collins]

Please CC to jmc AT xisl DOT com as I'm not subscribed.

On Tue, 2008-10-14 at 19:35 -0700, Charles Day wrote:
> On Tue, Oct 14, 2008 at 8:05 AM, John M Collins <jmc at xisl.com> wrote:
> 
>         Please CC to jmc AT xisl DOT com as I'm not subscribed.
>         
>         I'm having a bit of a problem with GNUcash in that the trial
>         balance is
>         out of balance when various transactions are done in multiple
>         currencies.
>         
>         I've got most of the accounts in £ sterling with some in Euros
>         and some
>         in US$
>         
>         I've been careful to account for sums in US$ including
>         accounts
>         receivable etc. But the problem is when the bank converts
>         between
>         currencies and I use "transfer" it lets me put in whatever
>         rate the bank
>         has given but keeps all the other accounts showing the
>         original
>         conversion rate. I think that something should be posted to a
>         "currency
>         variations" account.
>         
>         I've ended up with a significant difference in the columns of
>         the "trial
>         balance" account.
>         
>         Can anyone suggest how I can get the trial balance into order
>         without
>         deleting all the transactions?
>         
> 
> What is the reporting currency used for the trial balance report? (I
> assume it's GBP.)

Yes it is GBP


> Once you buy USD and EUR, where do they go? Do they ever get changed
> back into GBP or another currency?

The EUR transactions were a little bit complicated as in the case of
Spain the customer withholds 10% which I then have to claim back out of
my next payment to the UK tax people. So we end up wrestling with:

     1. The GBP/EUR rate when the invoice was raised.
     2. The rate when the customer pays 90%
     3. The rate when that is converted to GBP by the bank which is
        different even if done on the same day as 2.
     4. The rate when I do the tax return.

Of course these are all different.

I think the GBP/USD problems are limited to just one point back in
August. I'd kept all USD receipts in a $ bank account whilst the £ was
sky-high against the $. When the £ sunk against the dollar I transferred
most of the $ account to a £ account (of course I did that too early
because the £ sank a lot more - sigh!). I put in the transaction using
"transfer" and gave the rate that the bank converted it at which was
different (worse of course - and they charge a commission on top) from
what Finance::Quote thought.

I think that caused the accounts imbalance to arise as the value of all
the USD accounts were calculated at the value given by "Finance::Quote"
but the GBP bank account was credited by a different amount. A sum
should have been debited to a "currency conversions" account to make the
accounts balance GBP-wise.

A more complicated version of the same thing happened with the EUR
accounts.

> 
> Also, please look over the exchange rates in the Price Editor. Do you
> see entries at all that have an exchange rate of exactly 1? If so,
> make a note of the dates. On those dates you have at least one
> transaction with an incorrect exchange rate, probably due to a bug.
> (Upgrading to 2.2.7 should help prevent further errors.)

Yes there were several bogus entries.

I have downloaded and installed 2.2.7 and played with it but it seems
there is still a problem - which I suspect is a bug - in this area. If
you fill in the transfer with a specified amount that the bank actually
converted it for rather than the rate which Finance::Quote believes in
you will get an imbalance in the trial balance.

I think the only way is to do the conversion at the current
"Finance::Quote" rate, see what that credits to the GBP bank account and
then put in an appropriate (GBP of course) transaction between the GBP
bank account and a "currency conversions to GBP" P&L account to make the
net amount credited to the GBP bank account agree with what the bank
actually credits.

The problem I have now is how to get the trial balance report balancing.
It looks as if I'll have to delete all the USD/GBP and EUR/GBP
transactions and re-enter them in the way I've described.

Or is there any better way? I'd be grateful if you could advise before I
do - thanks.


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