exchange rates... which one?

[Tim Hume]

Hi Morgan,

I'm not totally sure how you've got things set up. But wouldn't it make
sense to have your student loan account denominated in NZD (because
that's what IRD uses - they don't care if you're in the UK or Upper
Volta for the purposes of the loan)? Penalty payments, interest and so
on will be calculated based on the NZD balance, irrespective of any
exchange rate.

When it comes time to make a payment (or pay a penalty), just look at
the exchange rate at that point in time, and convert the payment or
penalty to pounds. I've never used the scheduled transactions - but what
I'd do if doing it manually would be to do a transfer (Ctrl-t or the
transfer icon) from your UK account to the NZ account, and at that
point you get the opportunity to enter the UK-NZ exchange rate that
you'll be using. But if you want things to happen automatically,
perhaps you can have another account denominated in NZD which you
manually top up from time to time. Then schedule payments to come out
of this account where exchange rate doesn't matter.

In fact, whatever exchange rate is automatically fetched for you by
GnuCash will probably be optimistic. You'll have to go to your bank or
remittance provider and accept whatever they will give you - which will
usually be a _lot_ worse than the banks use to exchange money amongst
themselves (that's one way how they make money).

Cheers,

Tim.

On Sun, 22 Jan 2017 10:11:18 +0000
Morgan Read <mstuff at read.org.nz> wrote:

> Hello Folk
> 
> Exchange rates - gnucash seems very capable in this area.  However,
> there is a little matter I'm confused about.
> 
> I set up my accounts - I'm in the UK and I have a student loan from
> NZ...  (Any Kiwi expats out their will now roll their eyes skyward
> until only the whites show and then fall backwards from their stool
> and lie comatose on the floor.)
> 
> So, I've started everything from a year back - well, a year an 22 days
> by now.  I've entered the exchange rate for the opening balance at the
> time I've started, 01.01.16.  I've set up the auto-quoting of NZD in
> the Price Editor - the first entry 01.01.16 shows the source as
> 'user:xfer-dialog as, I assume, I entered that manually at the time of
> account creation.  The following, dated this month, show the source as
> 'Finance::Quote' indicating that they're auto-retrieved from an online
> source (v clever, impressive).
> 
> My question is, does the exchange rate used at the time of account
> creation stay stuck with the transaction of that date - that is what
> would have expected given when looking at that I'm looking at an
> historic transaction and would expect to be looking at the historic
> value of that transaction.
> 
> If the above is correct, what exchange rate is applied to (periodic)
> transactions during the course of the year - for instance, penalty
> interest rates applied by our beloved Inland Revenue Department?  Do I
> have to update manually the exchange rate for every transaction?  If I
> then hit the 'Remove Old' on the Price Editor and those exchange rates
> are removed - what exchange rate is applied to the transactions which
> relied on the removed exchange rate...?
> 
> Many thanks for any insight.
> 
> Regrards
> Morgan
> 
> -- 
> Morgan Read
> P 07563-650.923
> E mstuff at read.org.nz
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-- 
Tim Hume <tim at nomuka.com>