Purchases in a foreign currency

[Adam Funk]

On 2010-04-07, Paul A. wrote:

>
> I more or less understand how GnuCash handles accounts in different
> currencies, but I still wonder how to handle individual transactions in
> different currencies.  My Visa account is denominated in USD, and I want to
> keep it that way.  If I travel to France, say, and pay for a hotel bill with
> my Visa card, I know what I paid in euros.  But is there any easy way to
> enter that transaction in USD?
>
> An extra complication: exchange rates vary with time, so I need the exchange
> rate at the time of the transaction, not as of today.  Can GnuCash help me
> with that?

Here's how I do that.  I'm assuming your main currency is USD and I'm
making up account names similar to mine.

1. Guess how much your card issuer is going to charge you in USD,
   based on recent exchange rates, and enter a transaction for that in
   Liabilities:Credit Cards:Visa against
   Expenses:Travel:Accommodation, both in USD.  Put "**ESTIMATED**" at
   the end of the transaction description.  I also put "(EUR 444.50)"
   in the description.

2. Check your account on-line a few days later, or wait for your
   statement, amend the first transaction to the right USD amount, and
   delete "**ESTIMATED**" from the description.

You don't know exactly what the USD amount will be until it appears on
your credit card account, but you don't need to handle the EUR amount
as such in GnuCash.  (If you make a cash withdrawal in EUR from a USD
bank account, it's a different kettle of fish, of course.)

Does this make sense?