mta at umich.edu
Sat Jan 8 13:21:28 EST 2011
--On January 8, 2011 3:17:43 PM +0000 Ken <kmailuk at gmail.com> wrote:
> Thanks for your reply but I am not sure I follow your point. In your
> example the user has made two FX transactions at different FX rates.
> In terms of reporting the values of the trades one could use the
> average of the two rates as the fair market conversion or one could
> have a third GBP/USD price series which indicates the fair market
> conversion rate or something similar. Just because the FX conversion
> at Bank A (or at a bid price) and the conversion at Bank B (or at the
> ask price) are different should not mean a jump should be impossible.
> My point is if I have prices for IBM/USD (say $150/share and I have
> 100 shares) and I have prices for GBP/USD (say $1.50/£ and I have
> £1,000), I can generate a report in reporting currency USD. But if I
> want to generate a report in GBP, GnuCash is not capable of doing this
> even though it has all the necessary information. Is it not possible
> to add functionality? The calculation of only a single conversion
> jump would greatly improve the reporting functionality in a
> multi-currency/asset environment. What am I missing?
You can't really chain currency conversions since there is "friction"
in them. Converting USD->GBP->EUR isn't the same as converting
USD->EUR. However GnuCash already ignores this to some extent since it
uses inverse conversions. If it has a USD->GBP conversion I think it
uses it to convert GBP->USD which isn't really legitimate either.
However, it might make sense to do what you suggest so long as only two
of the commodities involved are currencies. Something like
stock->currency->currency or currency->currency->stock. I'm not sure
if this makes sense or not, but it might.
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