Weird behaviour with trading accounts?

Mike Alexander mta at umich.edu
Thu Aug 23 00:21:47 EDT 2012


--On August 21, 2012 11:17:31 PM +0200 Mark <msalists at gmx.net> wrote:

> Hello all,
>
> I am trying to figure out the trading accounts for using multiple
> currencies.
> I also read Peter Selinger's tutorials that has been quoted in the
> past:
> http://www.mscs.dal.ca/~selinger/accounting/gnucash.html and
> http://www.mscs.dal.ca/~selinger/accounting/tutorial.html
>
> I am using a simple example with one transaction only, but do not get
> the expected result.
>
> 1. I create a new gnucash file using USD as default currency.
> 2. I add a "EUR checking" account under "Current Assets"
> 3. I create a USD/EUR exchange price in the price editor (currency
> USD, security EUR, rate 1,247 using the "Get Quotes" button.
> 4. I create a new transaction in "EUR checking":
>      EUR checking     -100
>      Imbalance-EUR    +100
> 5. I change the transaction account from Imbalance-EUR to
> Expenses:Diner.
>      This pops up the exchange rate account with the exchange rate
> from step 3 as default. I accept this rate and click OK
> 6. GnuCash now splits my transaction from step 4 into this:
>      Expenses:Dining                        +100,00 USD
>      Imbalance-EUR                          +19,81 (no currency shown
> - I guess EUR)
>      Trading:CURRENCY:EUR                 +80,19 (no currency shown -
> I guess EUR)
>      Assets:Current Assets:EUR checking    -100,00 (no currency shown
> - I guess EUR)
>      Trading:CURRENCY:USD                -100,00 USD
>
> I admit I still have not fully grasped the entire trading account
> theory up to the last detail, but a few things about this example
> still seem very odd to me:
>      - shouldn't the Expenses:Dining entry be +124,70 instead of
> +100,00?
>      - Why is there still an entry in Imbalance-EUR? How can I get
> rid of that???
>
> What I would have expected to get in 6. is something like this:
>      Expenses:Dining                        +124,70 USD
>      Trading:CURRENCY:EUR                 ???,?? ???
>      Assets:Current Assets:EUR checking    -100,00 (no currency shown
> - I guess EUR)
>      Trading:CURRENCY:USD                 ???,?? ???
>
> This is happening with both 2.4.10 and 2.4.11.
>
> Is CnuCash doing the right thing???

Why create the imbalance account?  Just set the other side of the 
transaction correctly in the first place and it works better.  I did 
what I think you were trying to do:

1. Create a EUR checking account
2. Add a transaction that spends €100 from that account to 
Expenses:Dining

When I tabbed out of that transaction it asked for an exchange rate and 
I gave it 1.247.  This created a transaction with 4 splits:

    Dining              Amount $124.70  Value €100.00
    Trading:EUR         Amount €100.00  Value €100.00
    EUR Checking        Amount -€100.00 Value -€100.00
    Trading:USD         Amount -$124.70 Value -€100.00

This is pretty much what I would expect.

Each split has an amount that is in the currency of the account 
associated with the split and a value which is in the currency of the 
transaction (EUR in this case).  The value and the amounts in each 
currency must all sum to zero.  The exchange rate is the ratio between 
the value and the amount if they are in different currencies.

There may be some problems entering exchange rates, especially in the 
2.4.xx versions, but things work pretty well if you follow simple steps 
like this.



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