Question about multiple currencies

[Charles Day]

On Mon, Oct 20, 2008 at 9:26 AM, Derek Atkins <warlord at mit.edu> wrote:

> I have one major issue with Peter's page -- he conflated Realized and
> Unrealized gains/losses and never really talks about the difference
> between them and when/how you should compute/account for one vs the
> other.  But I agree that the rest of his document is spot on, but this
> one issues is IMHO a major flaw in his thesis.
>

I think of trading accounts as a way to keep all transactions balanced in
all currencies. Effectively it lets the various currencies in your books be
fenced off from one another such that a trial balance report restricted to
accounts of a particular currency would still balance. As would the books as
a whole.

Although it's true that the total shown for the parent account represents a
combined total of realized gains and unrealized gains, you can separate them
any time you want (unless I misunderstand) by transferring the realized
gains into a separate income account. Personally, lumping all gains together
until close to tax time sounds actually convenient so that I can delay
figuring out what gain I want to take on a particular sale until the tax
impact is known. The same method could be used to accumulate investment
gains as well.

However ultimately it would be nicer, at least from my perspective, to not
use trading accounts. Instead I would prefer some nice lot management tools
that allow you to figure realized gains in various ways, change which lot
goes with which sale, and perhaps even delay making that decision until long
after the sale occurs. Hopefully I wouldn't even have to enter the gains
myself; the tools would take care of that. But I think we are a long ways
out from that (I still intend to attempt to clean up lots at some point).


> -derek
>
> John M Collins <jmc at xisl.com> writes:
>
> > Yes indeed - I think that Peter Selinger's page is exactly on point.
> >
> > On Sat, 2008-10-18 at 00:37 -0400, Mike Alexander wrote:
> >
> >> --On October 15, 2008 3:38:02 PM +0100 John M Collins <jmc at xisl.com>
> >> wrote:
> >>
> >> > Further to my previous message of this morning I tried deleting all
> >> > the "offending" transactions and then when I run "trial balance" I
> >> > get this at the bottom of it:
> >> >
> >> > Unrealized Gains
> >> >                        £
> >> >
> >> >
> >> >                       £
> >> >              £919,651.64
> >> >
> >> > Any idea what is going on?
> >> >
> >> > And how do I "repair" the accounts?
> >> >
> >> > (I did run check and repair all but it made no difference).
> >> >
> >> > Thanks for any help anyone can give.
> >>
> >> You might want to take a look at
> >> <http://bugzilla.gnome.org/show_bug.cgi?id=537476> and
> >> <http://www.mathstat.dal.ca/~selinger/accounting/gnucash.html<http://www.mathstat.dal.ca/%7Eselinger/accounting/gnucash.html>>
> to see
> >> if they are related to your problem.
> >
> >
> > John Collins Xi Software Ltd www.xisl.com
> >
> > Tel: +44 (0)1707 886110 (Direct)
> >      +44 (0)7799 113162 (Mobile)
> >
> > Registered in England & Wales Company Number 1977148 VAT: GB 403 9239 64
> >
> > Trading Address: 3 Mandeville Rise, Welwyn Garden City, Herts, AL8 7JT,
> > UK
> > Reg Office: 2 Mill Road, Haverhill, Suffolk, CB9 8BD, UK
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> --
>       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
>

Cheers,
Charles