Inability to correct GBP value for Euro priced shares

Eric Coates eric.coates at sky.com
Thu Jun 8 13:41:10 EDT 2017


Maf

Thanks for taking the time.

Airbus Group is Air.PA and it is that stock whose value I "collect".

The difference between the €73.07 I quoted and "your" €73.50 is 
(probably) because the price I collected was from 31st May. I "froze" my 
accounts at that time to allow (some) certainty in my investigations.

But your comment has raised another observation: I updated (on 7th June) 
my collected share values and AIR.PA had risen to €73.95 BUT the value 
of the 89 shares is still reported as £3989 (in the "Present GBP" column 
of the account listing). (The change in the value of holdings in GBP 
denominated shares did change in line with the updated prices.)

In fact, an examination of the real value of the Airbus shares 
(expressed in Euros) ie €73.03 and the implied present value in GBP 
£3989/89 ie £44.82 implies an exchange rate of €1 = £1.62 which has 
never (I believe) been the case. It looks as if gnuCash is just making 
things up.

Or, more likely, I'm totally misunderstanding what's happening.

Eric


On 08/06/17 15:04, Maf. King wrote:
> Hi Eric,
>
> Are you sure you're getting the correct price for the shares?
>
> There's a stock called AIR which is (presently) USD 34.64, and given the
> current $/£ rate makes 89 shares worth around £4k.
>
> You may be after the stock AIR.PA, showing right now as €73.50
>
>
> gnc-fq-dump yahoo_europe AIR.PA
>
> Finance::Quote fields Gnucash uses:
>      symbol: AIR.PA               <=== required
>        date: 06/08/2017           <=== recommended
>    currency: EUR                  <=== required
>        last: 73.50                <=\
>         nav:                      <=== one of these
>       price: 73.50                <=/
>    timezone:                      <=== optional
>
>
> HTH,
> Maf.
>
>
>
> On Thursday, 8 June 2017 14:36:07 BST Eric Coates wrote:
>> 8th June 2017
>>
>> I’m having trouble with getting a valuation (in pounds sterling –
>> hereafter GBP – I am based in the UK) for a share I own that is priced
>> in Euros.
>>
>> To bore you with the details my original account listing was of this form:
>>
>> Assets
>>
>>   >My Assets
>>   >
>>   >>My Portfolio
>>   >>
>>   >>>My Cash
>>   >>>
>>   >>>My Shares
>>   >>>
>>   >>>>Airbus Group
>>   >>>>
>>   >>>> Standard GBP denominated shares
>>
>> etc etc
>>
>> At this point everything except “Airbus Group” was denominated in GBPs,
>> Airbus Group was denominated in Euros.
>>
>> I noticed the problem when I realised that value of the Airbus Group
>> shares (in the column headed "Present(GBP)"was given as £3989 but the
>> real value should be 89(the number of shares)*€73.07(the value of each
>> share)*0.87(the Euro to GBP exchange rate) ie £5658. (All the numbers
>> are rounded.)
>>
>> Using the information I found during various web searches (insofar as I
>> understood it all) it seemed the problem might be that the account “My
>> Shares” was denominated in GBP but “Airbus Group” is denominated in
>> Euros. I modified the account structure to the following form:
>>
>> Assets
>>
>>   >My Assets
>>   >
>>   >>My Portfolio
>>   >>
>>   >>>My Cash
>>   >>>
>>   >>>>Cash Euros
>>   >>>>
>>   >>>>Cash Pounds
>>   >>>
>>   >>>My Eurex Shares
>>   >>>
>>   >>>>Airbus Group
>>   >>>
>>   >>>My LSE Shares
>>   >>>
>>   >>>> Standard GBP denominated shares
>>
>> etc etc
>>
>> With “Cash Euros”, “My Eurex Shares” and “Airbus Group” denominated in
>> Euros, everything else is denominated in GBPs.
>>
>> I transferred some funds from “Cash Pounds” to “Cash Euros”; the
>> original “Airbus Group” was deleted and a new account was reconstituted
>> (there were very few entries) with the purchase made from “Cash Euros”.
>>
>> The result was that the GBP value of the Airbus shares was (still) shown
>> as £3989.
>>
>> More web searches revealed nothing that I recognised as of relevance.
>>
>> The only thoughts that I have that may be significant are:
>> (A) “Cash Euros” and “Airbus Group”, although denominated in Euros, are
>> deep(ish) in a tree denominated in GBPs and, in particular, “Cash Euros”
>> is a sub-account of “My Cash” which is denominated in GBPs. Does this
>> somehow interfere with the correct accounting?
>>
>> (B) My broker pays Airbus dividends to me in GBPs and thus some of the
>> transactions in the “Airbus Group” account reference the “Cash Pounds”
>> account. If this is the problem: assuming the dividend I receive is
>> £12.34 would it be possible to credit €12.34 to “Cash Euro” and transfer
>> it to “Cash Pounds” at an exchange rate of 1:1 without screwing up
>> something else?
>>
>> I suppose I could just live with the “error” but what is accounting
>> without accuracy!
>>
>> A separate set of accounts for one share seems too much like overkill.
>>
>> Thanks in advance for any help or advice offered.
>>
>>
>> Eric Coates
>>
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