Handling multiple currency in GNUCash

[David Carlson]

On 10/19/2012 10:32 AM, Abrash Pervaiz wrote:
> Hi everyone, 
> I am trying to implement GNUCash 2.4.11 in a small business setting and have found it to be a very useful resource (considering it is free). However, I am having some issues with handling multiple currency and was hoping to find some advice from users who might be having a similar setup.
> Here's the background: The business is a small fashion retail store and I am trying to help them in the implementation of a computerized accounting system (currently, all the books are maintained manually). Due to limited funds, the natural choice was to search for free accounting software. I have just started using GNU for the past two days and have set up all the accounts, which is a pretty straightforward process. The tricky part is handling multiple currencies. The business I am working with uses three currencies, and I am having trouble in figuring out how to record gains/losses due to currency fluctuations.
> Let's say my base currency is Currency A from Country A and the owner sources his clothing material from Country B (having Currency B). However, Country B does not accept Country A's currency directly, so the owner has to first purchase US Dollars, take them to Country B, convert to Currency B there, and then purchase the required clothing he wants to sell back in Country A. During this time, the currencies will obviously fluctuate, and there will be gains or losses due this fluctuation, which have to be recorded in the books. I have currently set up different accounts for the US Dollars and Currency B he purchases and did a few example transactions based on different currency exchange rates. If the rates fluctuate, the balance sheet report shows some "unrealized gains/losses", and I do not know how to make those unrealized gains into realized gains.
> Can anyone help? Feel free to ask for more information if I was not clear enough.
> Cheers. 		 	   		  
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Take a look at the Tutorial and Concepts Guide section on multiple
currencies.  Look for the reference to a section on using trading
accounts.  I do not use multiple currencies myself, but if I did, I
would check that out. Search this mail-list for other discussion, as
this is a frequent topic.

Best,

David C



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