Using multiple currencies

[Mike or Penny Novack]

On 5/7/2016 11:06 AM, John Ralls wrote:
>> On May 7, 2016, at 7:52 AM, Mike or Penny Novack <mpnovack at mtdata.com> wrote:
>>
>> On 5/6/2016 5:18 PM, John Ralls wrote:

> That's a workable option if one's financial affairs are really that isolated, but it seems an unlikely scenario. Even if one has arranged life so that one has completely separate asset accounts fed by separate income streams that are separately taxed one is likely to want to have an aggregate income statement with both halves reduced to a single currency.
>
> Of course for all of those people recently featured in the "Panama Papers" it probably is preferable to have separate files. On separate computers in places that can only be raided by the tax authorities of the country for which that particular set of accounts applies. ;-)
>
> Regards,
> John Ralls
>
>
I was NOT meaning to imply that you would not want that information (net 
income, net worth, etc. computed in terms of ONE of the currencies). 
Just that you MIGHT want to do that via separate books. After all, it is 
then just a couple numbers to apply an exchange rate to and add up. And 
yes, I do know folks (mainly in academia) who do have income/expenses by 
country << might be on faculty of a university in one country but 
living/working in their "home" country during "vacation" --- taking 
summer session jobs, etc. in their "home country" precisely because that 
lets them easily visit kin, etc. >>

But no, you would NOT have to be Panama Paper level dodgers to want to 
be "hiding the pigs". There is a general principle not to show/disclose 
any information you are not required to show or disclose. And this is 
not just with regard to the authorities, so I will mention something 
that keeps coming up with sole proprietorships.

Were I owning a business, even though sole owner I would keep that set 
of books separate from my personal books. More or less the way a 
partnership would, except for there not being any other partners. Why? 
Consider the situation were you negotiating to sell the business. What 
do you want (or not want) to show a prospective buyer? Aren't your OTHER 
financial positions something you would not want to be disclosing?
<< to those of you who would suggest just producing and printing off 
selective reports, might I point out that I would not accept that as 
potential buyer; who is to say that those weren't simply created out of 
thin air! For the organizations where I am treasurer I insist that 
without warning another officer get a bank statement directly from the 
bank and NOT verify by looking at the paper statement I received from 
the bank. After all, a major financial institution used to pay me to 
program systems to produce statements just like that, so who is to say 
that piece of paper was printed by the bank and not by my own computer  
system >>

Michael D Novack