Handling multiple currency in GNUCash
Abrash Pervaiz
abrash_p at hotmail.com
Sat Oct 20 12:57:13 EDT 2012
Hello again,
Thanks for everyone who replied. I have briefly gone over the tutorial and will go in further detail to see if it helps, including using the trading accounts. However, I have decided to delay this just to give the owner a bit of time to get acclimatised to the new accounting system without the added hassle of dealing with multiple currencies (which is complicated enough for me, at least in GNU, so far).
I have run into another problem though. I think it is a bug and I am not sure whether it's happening just on my system or is a general issue with ver 2.4.11. I ran the "balance sheet" and "profit and loss" reports on some dummy data, and the top level accounts they show are not balanced (they are balanced on the main screen). For example, the "Assets" account only holds a "zero" balance whereas it should add up all the asset accounts (text dump is shown below):
Assets $ 0.00 Current Assets $ 0.00 Petty Cash $ 0.00 Inventory $ 58,850.00 Prepaid Rent $ 0.00 Checking Account $ 52,500.00 Savings Account $ 0.00 Accounts Receivable $ 0.00
The accounts on the main screen hold proper balances, so the issue seems to be with report generation. Is anyone else experiencing this?
-Abrash
> From: gnucash-user-request at gnucash.org
> Subject: gnucash-user Digest, Vol 115, Issue 28
> To: gnucash-user at gnucash.org
> Date: Sat, 20 Oct 2012 12:00:02 -0400
>
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> Today's Topics:
>
> 1. Inspecting/editing the bayes database? (Marc Sherman)
> 2. Re: Handling multiple currency in GNUCash (David Carlson)
> 3. Re: Handling multiple currency in GNUCash (Andrew Sullivan)
> 4. Re: Help with GnuCash! Accounting vs a Math degree (Dean Gibson)
> 5. Opening balance doubles in ONE DAY??? (BKclub)
> 6. Re: Japanese font of reports on Mac OS X (John Ralls)
>
>
> ----------------------------------------------------------------------
>
> Message: 1
> Date: Fri, 19 Oct 2012 12:51:53 -0400
> From: Marc Sherman <msherman at projectile.ca>
> To: gnucash-user at gnucash.org
> Subject: Inspecting/editing the bayes database?
> Message-ID: <50818529.2080504 at projectile.ca>
> Content-Type: text/plain; charset=ISO-8859-1; format=flowed
>
> On 10/19/2012 10:45 AM, Derek Atkins wrote:
> >
> > File -> Import -> <format>
> >
> > Then during the import make your assignments. GnuCash will learn from
> > your assignments and apply them to future imports. However, keep in
> > mind that QIF will only match on *full strings* whereas OFX, HBCI, etc
> > can perform a Bayesian-style matching on individual tokens.
> >
> > Also remember that these manual mappings will only get applied to future
> > imports.
>
> On a related note -- is there any way to inspect/edit the database of
> bayes tokens?
>
> After doing some imports, I did some reorganization of my expense
> hierarchy, and now none of the expense types that I moved will properly
> match to their new accounts (presumably because the db still has matches
> to the old expense accounts which are conflicting with the new locations).
>
> I'd like to manually prune those old locations from the db.
>
> Thanks,
> - Marc
>
>
>
>
> ------------------------------
>
> Message: 2
> Date: Fri, 19 Oct 2012 12:06:01 -0500
> From: David Carlson <carlson.dl at sbcglobal.net>
> To: gnucash-user at gnucash.org
> Subject: Re: Handling multiple currency in GNUCash
> Message-ID: <50818879.1060007 at sbcglobal.net>
> Content-Type: text/plain; charset="iso-8859-1"
>
> 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.
> > _______________________________________________
> > gnucash-user mailing list
> > gnucash-user at gnucash.org
> > https://lists.gnucash.org/mailman/listinfo/gnucash-user
> > -----
> > Please remember to CC this list on all your replies.
> > You can do this by using Reply-To-List or Reply-All.
> >
> 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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> ------------------------------
>
> Message: 3
> Date: Fri, 19 Oct 2012 14:11:06 -0400
> From: Andrew Sullivan <ajs at anvilwalrusden.com>
> To: gnucash-user at gnucash.org
> Subject: Re: Handling multiple currency in GNUCash
> Message-ID: <20121019181105.GE22660 at mx1.yitter.info>
> Content-Type: text/plain; charset=us-ascii
>
> On Fri, Oct 19, 2012 at 08:32:34PM +0500, Abrash Pervaiz wrote:
> > 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.
>
> I have generally done another operation, moving the gain into an account to track these things. My experience with the foreign currency approach in GNUCash is sufficiently bad, however, that I recommend tracking in one account for the duration of the year (or whatever your reporting period is) and then doing the operation all at once. To make it work really well, you have to track the exchange rates very finely, and I found that too hard to do.
>
> My accountant hates the FC handling in GNUCash so much that I'm going to be forced to ditch it all and use QuickBooks, I think.
>
> A
>
> --
> Andrew Sullivan
> ajs at anvilwalrusden.com
>
>
> ------------------------------
>
> Message: 4
> Date: Fri, 19 Oct 2012 11:12:16 -0700
> From: Dean Gibson <gnucash at ultimeth.com>
> Cc: Users Gnucash <gnucash-user at gnucash.org>
> Subject: Re: Help with GnuCash! Accounting vs a Math degree
> Message-ID: <50819800.9050001 at ultimeth.com>
> Content-Type: text/plain; charset=UTF-8; format=flowed
>
>
> On 2012-10-18 19:53, Robby Burns wrote:
> > My thanks to those who have tried to help me. It is amazing to me how
> > complicated this seems to be...considering that I was a math major in
> > college.
> >
>
> I too was a math major (at CalTech), and when I had to install an
> accounting software system at a company, I had to learn a bit about
> accounting:
>
> First, like you, I found that accounting has nothing to do with math;
> it has to do with record-keeping. However, being a mathematician helps
> a little, because both disciplines require precise thinking and logic.
> Just like advanced math, sometimes the logic seems twisted at times, but
> don't fight it; it makes sense after a little thought.
>
> Second, don't try to defeat "double-entry" accounting. If you want
> that, use Quicken (which I did for years, until I got tired of the lack
> of tracking that any "double-entry" accounting system easily provides).
>
> Third, unless one is already VERY familiar with accounting, I strongly
> suggest that in GnuCash you use the formal accounting labels of "debit"
> and "credit", and set "Reverse Balanced Accounts" to "None". It may be
> initially confusing, but not as confusing (to a newbie) as a system
> which represents positive/negative numbers differently in different
> accounts.
>
> Forth, read up on the difference between "cash accounting" and "accrual
> accounting". I recommend "accrual", because (except for very simple
> needs) it seems more logical, AND it allows you to easily keep track of
> money owed (eg, "Accounts Payable" -- sometimes denoted as "A/P"). I
> personally don't mark "accounts payable" accounts as "Accounts Payable"
> in GnuCash, because (for me) it makes it difficult to make changes to
> such transactions. As a result, for each credit card account, I have a
> current liability account (charges since the last reconciliation) and a
> separate "A/P" (actually, liability) account to track bills.
>
> Fifth, don't be afraid to set up a lot of accounts (at least initially),
> and use a tree-structure for account grouping. In GnuCash, you can
> easily combine transactions in accounts later, but it is A REAL PAIN to
> decide later to split them out according to a new need. I see people
> here fussing about how to set up reports to get the information they
> want. The key is to group transactions into enough separate accounts so
> that the reporting is easy. In fact, I don't even use GnuCash reports;
> I get all the summary info I need from the main account list (where I
> have enabled the display of current and reconciled balances).
>
> Sixth, while there are "add-on" to accounting systems that allow
> budgeting, stock tracking, etc., fundamentally, accounting is a system
> of keeping track of what HAPPENED (historical transactions), not
> forecasting or tracking current value.
>
> Finally, I view "double-entry" accounting as a small five-sided
> building. Each side of the building has a window with a little man at
> the window, wearing a green cap. Each man at each window records any
> money that passes through his hands, but no money is ever kept inside
> the building; it always goes out through another (or the same) window.
> Over each window is a sign with the type of accounts handled by that
> window (eg, Asset, Liability, Expense, Income, Equity), along with a
> little reminder as to whether that type of account is normally is a
> debit (Asset, Expense) or credit (Liability, Income, Equity), so that
> the little man doesn't laugh at you when you come to the window with the
> wrong type of request. Examples:
>
> 1. You want to purchase something that is an expense. You go to the
> "Assets" window with the money, and tell the little man where you
> got the money (eg, petty cash, bank account). He hands the money
> inside the building to the man at the "Expense" window, where you
> take the money back an go buy the item. Both of the little men
> record (in the transaction ledger) the transaction: a debit
> (increase) to the expense account, and a credit (decrease) to the
> bank asset account. OK, so this is a bit pedantic, but keep the
> general idea in mind.
> 2. You buy an asset (something you plan to keep for a period). The
> money comes in (say, from the bank) and goes out the same window,
> recorded as the initial value of a fixed (owned) asset. Create and
> debit (increase) the new fixed asset account, credit (decrease) the
> bank asset account.
> 3. The value of the asset decreases. This is a depreciation expense
> (typically recorded at the end of the financial year), recorded as a
> corresponding decrease in the value of the asset. Debit (increase)
> the expense account, credit (decrease) the fixed asset account.
> 4. You get a loan. Money comes in through the "Liabilities" window,
> and out (presumably to the bank) through the "Assets" window. Debit
> (decrease) the bank asset account, credit (increase) a (new)
> liability account
> 5. The loan accumulates interest. Debit (increase) an interest expense
> account, credit (increase) the loan liability account.
> 6. You make a payment on the principal value of the loan. Debit
> (decrease) the loan liability account, credit (decrease) the bank
> asset account. Typically the payment is split between an interest
> payment and a principal payment. so you normally record both in a
> "split" transaction.
> 7. You charge something on your credit card. Debit (increase) the
> appropriate expense account, credit (increase) the credit card
> liability account. I also have a summary grouping account, so I can
> see the total of all my unbilled credit card charges.
> 8. You get the monthly bill for the credit card. Debit (decrease) the
> credit card liability account. credit (increase) the "accounts
> payable" (liability) account. As I said above, I keep separate such
> "A/P" accounts for all my billers. In a summary grouping account, I
> can see the total of all my currently owing bills.
> 9. You get the monthly bill for something else. Debit (increase) the
> appropriate expense account, credit (increase) the appropriate "A/P"
> (liability) account.
> 10. You pay a monthly bill. Debit (decrease) the appropriate "A/P"
> (liability) account, credit (decrease) the bank asset account.
> 11. Income is similar. Debit (increase) the bank account, credit
> (increase) the appropriate income account. Use "accounts
> receivable"("A/R") accounts to track money owed you but not yet paid.
> 12. The owner adds money to (eg, at startup), or takes money from, the
> entire system. This is an Equity transaction. I keep a separate
> account for each financial year for my business.
> 13. At the end of the year, you "close the books" for that year. In
> GnuCash, this is very easy. I have two equity accounts: "Yearly
> Income" and "Yearly Expenses". I use the "Close Books" menu item,
> and specify these two accounts. All expense accounts are
> automatically "zeroed" out: a transaction is automatically
> generated to (typically) credit each actual expense account, and the
> corresponding debit is recorded in the "Yearly Expenses" account.
> The same thing happens for income accounts. Note that in GnuCash,
> these are just ordinary transactions, so if you have to go back and
> correct something in a "closed" year, you can delete the
> automatically generated closing transactions, go back and fix
> things, and then "re-close" the books for that year. I FIND THIS TO
> BE REALLY, REALLY USEFUL, if done correctly.
>
>
> Note that "double-entry" accounting-think treats some items illogically
> at first glance:
>
> 1. I record a salary advance as a debit (increase) to my bank account,
> and a credit (increase) to my salary advance LIABILITY account.
> It's a liability because it (conceptually) is money that I really
> haven't earned until I receive my actual pay check and pay stub for
> the pay period, at which point I debit (decrease) my salary advance
> liability account as part of the posting of my income received
> (along with Fed. income tax withheld, Social Security, Medicare, etc).
> 2. In a related "accounting-think", I record Fed. income tax withheld
> as a debit (increase) in a "tax withholding" asset account:
> Conceptually, it's still my money that the IRS is keeping for me to
> pay my yearly taxes. When I compute my yearly tax bill, that amount
> entered in an IRS tax (debit) expense account, offset by a credit
> (decrease) in the withholding asset account, and any difference is
> either a payment (credit) or refund (debit) to my bank account. If
> it's a refund, I will debit (increase) the refund to a tax refund
> "accounts receivable" ("A/R") account, to be credited (decreased)
> when the refund is received and debited (increased) to my bank
> account. Yes, I could immediately record the tax withheld as a tax
> expense, but then a refund has to be recorded as an "income" (in the
> next year), which doesn't seem correct.
>
>
> Note that some of this can be done more simply (eg, in a cash accounting
> setup), but I prefer the above for the level of detail and tracking it
> provides. Yes, it's a bit of work, but there is no magic: If you want
> to track your money, you have to devote the effort.
>
> What I really like about GnuCash is the integration with AqBanking. It
> makes much of the work of entering expenses automatic. So much so, that
> when I decided to get an additional VISA card for paying for business
> expenses, I disqualified banks that didn't support OFX integration. I
> have two GnuCash files: One (personal accounting) created by importing
> from Quicken, and another (home business accounting) created by
> importing from QuickBooks (see my "how-to" message earlier this year).
> I had twelve years of history in both Intuit programs, and it is nice to
> now be able to get to that history in ways that _I_ want, not in ways
> that the "geniuses" at Intuit decide.
>
> Note that some accounting professionals may "fuss" at my explanations or
> procedures. I welcome such "fussing" (corrections). I'm not an expert
> at this and welcome better ways to do things.
>
> -- Dean
>
>
> ------------------------------
>
> Message: 5
> Date: Fri, 19 Oct 2012 10:16:27 -0700 (PDT)
> From: BKclub <clubdeportivo at ymail.com>
> To: gnucash-user at gnucash.org
> Subject: Opening balance doubles in ONE DAY???
> Message-ID: <1350666987390-4657417.post at n4.nabble.com>
> Content-Type: text/plain; charset=us-ascii
>
> Hello,
>
> I am a new user to a GnuCash file that has been in use all year. I don't
> really know much but i'm figuring it out. My problem is the following, any
> help with be much appreciated. Please be patient.
>
> While running trial balances for each month until now, i found small
> differences here and there, i am working through them. however this catches
> my attention, lets say i ran trial balance for the month of JULY. Well i
> clicked and selected dates from july 1st to july 30th and it shows me a
> difference of 96,990.80 (which is impossible but not the point)... i
> realized i clicked 30th instead of 31st so i went back and fixed the date,
> but when i did it gave me 105,954.50. Im trying to figure out where all that
> money went or came from in ONE DAY?
>
> Any general help will do fine. Also, if there is a difference between the
> debit and the credit columns, how do i know where the error is?
>
>
>
> --
> View this message in context: http://gnucash.1415818.n4.nabble.com/Opening-balance-doubles-in-ONE-DAY-tp4657417.html
> Sent from the GnuCash - User mailing list archive at Nabble.com.
>
>
> ------------------------------
>
> Message: 6
> Date: Fri, 19 Oct 2012 13:36:15 -0700
> From: John Ralls <jralls at ceridwen.us>
> Cc: "gnucash-user at gnucash.org List" <gnucash-user at gnucash.org>
> Subject: Re: Japanese font of reports on Mac OS X
> Message-ID: <41A0C54C-158E-4A09-9ED1-4FE6F3625B3E at ceridwen.us>
> Content-Type: text/plain; charset=us-ascii
>
>
> On Oct 19, 2012, at 3:58 AM, Kurobuta <richard at nikkeione.com> wrote:
>
> > can you tell me the location of the pango.alias file?
> >
> > btw, I also get a backslash-character instead of the yen symbol.
>
>
> More user questions, so this is going to the User list.
>
> There isn't one until you create it in Gnucash.app/Contents/Resources/etc/pango.
>
> A backslash? That's strange. I don't have any problems with that. Are you using Gnucash from a dmg downloaded from Sourceforge?
>
> Regards,
> John Ralls
>
>
>
>
> ------------------------------
>
> _______________________________________________
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> gnucash-user at gnucash.org
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>
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