Balancing the balance sheet (multi-currency issues?)

Egbert van der Wal ewal at pointpro.nl
Mon Dec 23 16:20:09 EST 2013


Hi,

I partially do and partially don't see the issue. In the meantime, I've 
been reading Peter Selingers story about multi-currency accounting and 
how this can be done in gnucash. I also enabled trading accounts and 
this allows me to fix the issue, though I still need to set the currency 
selection to 'weighted average', all the others still give an unbalanced 
balance sheet.

However, no such scenario as you described took place. The accounting is 
in EUR. What happened in other currencies is this:

- An order has been placed in the USA in january which was billed in 
dollars and paid immediately by EU credit card. The amount subtracted 
from the credit card in EUR was entered as the matching amount for the 
transaction

- An order has been placed in Australia in february which was billed in 
AUD and paid immediately by paypal. The paypal account subtracted the 
money from a EU bank account in EUR.

- Another order has been placed in the USA in june, which was billed in 
dollars and paid immediately by EU credit card. Same story as above.


There was never any trading euro to dollar and back. At each occasion, a 
paymant was made in a foreign currency and the accompanying exchange 
rate was entered directly for that transaction.

Theoretically, this shouldn't bring in any disbalance, in my opinion, 
since no money was lost. What I suspect is happening is that due to the 
USD payments were made in a subaccount under 'Expenses', named 'Hardware 
USD' and with currency set to USD, and the AUD payments were made in a 
subaccount under 'Expenses' named 'Hardware AUD' and with currency set 
to AUD. Can it be so that even though for each transaction in USD the 
exact corresponding amount in EUR is entered, GnuCash tries to get an 
'average' exchange rate for the total amount of USD spent, which doesn't 
match reality and therefore results in a disbalance?

Thanks for the help.

Bye,

Egbert


On 23/12/13 21:27, Derek Atkins wrote:
> Egbert van der Wal <ewal at pointpro.nl> writes:
>
>> On 20/12/13 19:50, Derek Atkins wrote:
>>> Hi,
>>>
>>> Egbert van der Wal <ewal at pointpro.nl> writes:
>>>
>>>> How can I generate a balance sheet that has a total under 'Assets'
>>>> that exactly matches the total at the bottom of 'Liabilities &
>>>> Equity'?
>>> You need to account for the gains/losses of your currency exchanges.
>>>
>> Be that as it may, in all my accounting classes I've always been
>> taught that a balance should be... well... balanced! And it's not,
>> currently. Is there any way to reroute these gains / losses of
>> currency exchanges to an expenses account, for example, to make the
>> balance balance?
> It's not in balance because you made money appear or disappear without
> accounting for it.  For example, assume you buy €100 for $125.  Then
> some time later you trade them back for $120.  Now you have €0 and $120,
> but $5 magically disappeared.  I.e., your accounts are now out of
> balance unless you account for that $5 you lost in trading.  GnuCash has
> no way to track this due to the way multi-currency transactions are
> implemented, so you have to add the gain/loss manually.  Either that or
> you need to turn on Trading Accounts.
>
>> Thanks,
>>
>> Egbert van der Wal
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
> -derek
>




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