Unrealized Gains in Balance sheet wildly out of proportion

David Carlson david.carlson.417 at gmail.com
Sat May 9 19:20:54 EDT 2015

On 5/9/2015 10:46 AM, Jobjörn Folkesson wrote:
> Hello,
> First of all thank you for the software. I often recommend it to local
> chapters of the non-profit organisation I work for, and I use it myself
> both for my private economy and for smaller non-profit associations whose
> books I keep.
> With my own money I sometimes travel abroad and thus introduce foreign
> currencies to my GnuCash file. This works fine, except for one detail.
> According to my balance sheet I have unrealized gains of 6,7 million SEK,
> which is more than 20 times more than my total assets. A screenshot is
> attached.
> I have googled a bit and read part of a discussion on this list from 2008,
> but alas I can't understand what is going on. I am running GnuCash 2.6.4 on
> Debian stable (jessie), so my copy was built from rev 29bcdf1+ on
> 2014-11-15. Does anyone know if it is something I can fix?
> Regards,
> Jobjörn Folkesson
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This is the result of the way GnuCash handles transactions that involve
more than one currency and how GnuCash values currencies in reports.  It
has not been handled well by the program in my opinion as a user.  There
are no intrinsic errors in the program, just awkwardness in the way some
data is presented.

There have been some piecemeal attempts to address the problem. The most
notable one is the introduction of an optional feature called "Trading
Accounts" which is great for some erudite users, but not for casual users.

The underlying problem, in my view as a user, is a combination several
factors.  One involves the need to document conversions of unrealized
gains to realized gains in closing transactions where two or more
commodities or currencies are used.  Another is in the reporting system,
where there is no clear definition of selection methods to value assets
in various currencies, especially when some data is missing for some
assets on some dates.  A third is an artifact of the way certain parts
of GnuCash is coded, that makes it difficult or even impossible to
arrive at a 'nice' solution that works well for most users. 

I think that there could be some overall systematic compromise that
would default to something that casual users would find generally
acceptable.  It might be as simple as hiding the unrealized gains from
reports by default, with references in the manuals to ways to unhide
them and ways to make them more accurate or to easily find the 'holes'
in the data so the user can figure out where he would need to add data
that is missing.  Maybe there could be a report designed specifically to
help with identifying transactions that may be contributing to errors in
unrealized gains.

Whatever the actual cause of Jobjörn Folkesson's  problem might be, it
should be possible to answer that it does not  matter unless you need to
report certain information to appropriate taxing  bodies.

David C

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