Trading accounts - when do they make sense?

[Ian K]

Following on, I think it makes sense for most home users to keep expenses in
the base (home) currency, and just use foreign currency accounts for assets
and liabilities e.g. foreign cash/bank accounts/credit cards/loans etc.
Therefore expenses would not change as rates move, but as the value of the
foreign currency assets or liabilities change as rates move then the net
worth will fluctuate accordingly, and this will be shown on the Balance
Sheet as Trading Gains or Losses.

This of course applies equally as well to holdings of stocks or bonds (i.e.
domestic not just foreign) - the value of these move and Trading Accounts
will allow this movement to be reflected properly.



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