[GNC] multiple currencies in one transaction
Mike Alexander
mta at umich.edu
Mon Aug 19 18:36:20 EDT 2019
I’ve been thinking for a while about how the register could be changed to better handle multiple currency transactions with trading accounts turned on. Back when I implemented trading accounts I knew this was a problem. However at that time it was expected that the Register2 rewrite of the register code would make the old register code obsolete so I didn’t worry about it too much. This is clearly no longer a valid assumption.
It seems to me that the simplest solution, and one that might work reasonably well, is to make it possible (via a view option) to switch any register into the format used for non-currency registers where there are separate columns for shares, price, and value for each split. The labels would need to be changed for currency splits since “shares” becomes the value in the split’s currency, “price” becomes exchange rate, and "value" remains the value in the transaction currency. Getting all the details right might be tricky, but this seems to have possibilities.
The current code shows only one of those three values, and which one depends on whether trading accounts are turned on. If they are on it shows the value in the split’s currency. If off, it shows the value in the transaction's currency. This adds still more confusion to the situation. A simple change would be to make it always show the value in the split’s currency. At least then there wouldn’t be this confusion about what is being shown. I didn’t do this at the time because one of the goals was to make GnuCash work identical to the way it worked before if trading accounts were turned off.
If I get some free time I might try to play around with this idea and see where it goes. If anyone else thinks this might work and wants to take a crack at it, be my guest. My time for software development is very limited these days.
Mike
PS: this probably should be moved to the Dev list if someone wants to continue the discussion.
> On Aug 16, 2019, at 2:12 PM, John Ralls <jralls at ceridwen.us> wrote:
>
> It's a difference in the way that the register works with or without trading accounts. If trading accounts are turned off then the register displays all splits converted to that register account's currency. If they're on then it displays each split in its own account's currency, with symbols for all but the current register's currency.
>
> When dealing with multiple currencies "balance" can adopt different meanings. GnuCash requires that a transaction must balance in the transaction currency, which is generally the one for the account in whose register the transaction was created (or the first parent account denominated in a currency if the register is for a non-currency account). Since in a currency register the transaction currency value and the exchange rate between the register currency and transaction currency are hidden that can be difficult, especially in split view where the user is responsible for getting the (possibly invisible) values right. The more currencies involved in the transaction the harder it gets.
>
> Regards,
> John Ralls
>
>
>> On Aug 16, 2019, at 9:39 AM, Jeff Abrahamson <jeff at p27.eu> wrote:
>>
>> Thanks, that's great, I'll have a play with that after work.
>>
>> Two points concern me:
>>
>> 1. I don't see currency symbols in my registers. Is this a setting?
>>
>> 2. I've been taught in accounting that transactions must balance, and
>> so I was expecting to see the GBP register all in GBP, the CHF register
>> all in CHF, and the EUR register all in EUR. That is, if one sums the
>> columns of a register, the Dr and Cr columns should have the same sum.
>> Am I confused about this principle?
>>
>> I'll need to read about the trading accounts feature. As someone who
>> regularly spends money in several currencies, I don't really think of
>> these transactions as P&L related, though I'm aware they could be
>> modeled that way.
>>
>> Jeff
>>
>>
>> On 16/08/2019 18:13, Adrien Monteleone wrote:
>>> So the Cafe’s price was CHF 5.70?
>>> Your card was debited GBP 4.67?
>>>
>>> The Expense:Coffee account is set to EUR?
>>>
>>>
>>> First, yes, you’ll need Trading Accounts turned on.
>>>
>>> Second, open the price db and fetch rates, then check the EUR-GBP rate, you’ll need it later. (I don’t see a way around this at present) For this example, we’ll use 1.0957 which I fetched just now.
>>>
>>>
>>> Third, start your transaction by entering the following to ‘fund’ the card with CHF:
>>>
>>> Cr. Transferwise GBP 4.67
>>> Dr. Transferwise_CHF CHF 5.70
>>>
>>> (GnuCash will prompt for a GBP-CHF exhange rate, use the ‘debit’ radio button and field and enter the CHF amount, in this case, “-5.70")
>>>
>>> The transaction should now read something like:
>>>
>>>
>>> -----
>>>
>>> Account Debit Credit
>>>
>>> Assets:Current Assets:Transferwise 4.67
>>> Assets:Current Assets:Transferwise_CHF SFr.5.70
>>>
>>> -----
>>>
>>>
>>> (the 4.67 has no currency symbol because it is in the account’s currency - GBP)
>>>
>>> Fourth, enter the actual expense part of the transaction:
>>>
>>> Dr. Expenses:Coffee EUR 5.12
>>>
>>> The EUR 5.13 price is based on today’s rate between EUR-GBP above and calculated either on the side, or directly in the debit-entry field. (enter as: GBP*rate or 4.67*1.0957) We’re using the EUR-GBP instead of CHF-EUR because this transaction is being entered in the Transferwise (GBP) account.
>>>
>>> When GnuCash prompts for the exchange rate, simply commit the FX window. We couldn’t wait to fetch the rate here, because we’d have to back out and re-enter the amount in the register to match.
>>>
>>> Now, the transaction reads like this:
>>>
>>>
>>> -----
>>>
>>> Account Debit Credit
>>>
>>> Assets:Current Assets:Transferwise 4.67
>>> Assets:Current Assets:Transferwise_CHF SFr.5.70
>>> Expenses:Coffee €5.12
>>>
>>> -----
>>>
>>>
>>> Fifth, you need to balance this with CHF funds taken from the card:
>>>
>>> Cr. Transferwise_CHF 5.70
>>>
>>> (GnuCash will again prompt for exchange rate, use ‘debit’ and “5.70” for the amount)
>>>
>>> The transaction now looks like this:
>>>
>>>
>>> -----
>>>
>>> Account Debit Credit
>>>
>>> Assets:Current Assets:Transferwise 4.67
>>> Assets:Current Assets:Transferwise_CHF SFr.5.70
>>> Expenses:Coffee €5.12
>>> Assets:Current Assets:Transferwise_CHF SFr.5.70
>>>
>>> -----
>>>
>>>
>>> Sixth, since you have Trading Accounts turned on, when you hit `Enter` to commit this transaction GnuCash will add the balancing splits so your transaction looks like this in final form:
>>>
>>>
>>> -----
>>>
>>> Account Debit Credit
>>>
>>> Assets:Current Assets:Transferwise_CHF SFr.5.70
>>> Expenses:Coffee €5.12
>>> Trading:CURRENCY:GBP £4.67
>>> Assets:Current Assets:Transferwise 4.67
>>> Assets:Current Assets:Transferwise_CHF SFr.5.70
>>> Trading:CURRENCY:EUR €5.12
>>>
>>> -----
>>>
>>> You can of course, make the transaction more ‘complete’ (or complicated as per your perspective) by also using actual CHF-GBP and CHF-EUR rates and accounting for the conversion fee rather than using the ‘debit’ option for those two splits.
>>>
>>> You could also separate this into two transactions, one to ‘fund’ the CHF, then another to spend that on Coffee.
>>>
>>> Note, that I tried doing this from the Expense account, but it was messy. I also couldn’t find a way to get GnuCash to calculate the EUR price of the transaction for me using the fetched rate. Maybe someone else has a trick up their sleeve.
>>>
>>> Regards,
>>> Adrien
>>>
>>>
>>>> On Aug 15, 2019, at 9:38 AM, Jeff Abrahamson <jeff at p27.eu> wrote:
>>>>
>>>> I purchased a coffee in Switzerland using my GBP-based Transferwise
>>>> card. That card could hold a CHF balance, but on that day it held only
>>>> GBP. My local currency is EUR. So I can think of my coffee purchase as
>>>> two FX transactions: funding (GBP -> CHF) and an expense (CHF -> EUR).
>>>>
>>>> What Transferwise tells me is the amount of the purchase and the amount
>>>> of the transaction. (I can also poke further and find the exchange rate
>>>> they used and the minuscule fee, but the important point to me is the
>>>> the two endpoints.)
>>>>
>>>> Now what makes sense to me based on reading about accounting principles
>>>> for multiple currencies is that I should make one transaction thus:
>>>>
>>>> Coffee (CHF) <-- Bank (GBP) # This is the funding part of
>>>> the transaction.
>>>> Expense acct <-- Coffee (CHF) # Here I'm tracking the actual
>>>> expense.
>>>>
>>>> I put those in a single transaction for easier understanding later.
>>>> Here I've created a bank account for Transferwise (GBP) as well as
>>>> subaccounts of that called Transferwise_CHF and some others, denominated
>>>> in the indicated currencies. Those three accounts are transfer
>>>> accounts: I usually expect them to have zero balance.
>>>>
>>>> Transferwise_CHF <-- Transferwise (GBP) # This is the
>>>> funding part of the transaction.
>>>> Expense/cafe <-- Transferwise_CHF # Here I'm tracking
>>>> the actual expense.
>>>>
>>>> Gnucash asks me for some exchange rates, and I answer for the CHF - GBP
>>>> part with the specific numbers provided by Transferwise and for the GBP
>>>> - EUR part with the exchange rate I've downloaded for that date.
>>>>
>>>> I expect to see this in the account Transferwise_CHF
>>>>
>>>> 5.70 <-- 5.70 # This is the funding part of the transaction.
>>>> 5.70 <-- 5.70 # Here I'm tracking the actual expense.
>>>>
>>>> and this in the Transferwise (GBP) account
>>>>
>>>> 4.67 <-- 4.67 # This is the funding part of the transaction.
>>>> 4.67 <-- 4.67 # Here I'm tracking the actual expense.
>>>>
>>>> and something similar looking at the splits in the (euro-denominated
>>>> expense account).
>>>>
>>>> But what I see (from the perspective of the CHF account) is this, which
>>>> makes no sense to me:
>>>>
>>>> Gnucash has entered the 2.80, and deleting that split just makes it pop
>>>> up again. Something is terribly wrong if any account's view of the
>>>> transaction doesn't balance. (This is gnucash 3.4, ubuntu, build id
>>>> 3.4+ (2018-12-30).
>>>>
>>>> Is this my error or a bug in gnucash? Any pointers?
>>>>
>>>>
>>>> Somewhat related, I thought to import historical currencies, as I'm back
>>>> filling some data for analysis purposes. I grabbed 10 years of daily
>>>> quotes and imported them (3600 or so rows of data per currency). All ok
>>>> for GBP - EUR. When I do the same for CHF - EUR, gnucash says it's done
>>>> it, but the price database doesn't show more than a handful. When I do
>>>> it for JPY - EUR, gnucash says it's done but the price editor shows none
>>>> of them. The proposed exchange rates when entering transactions are
>>>> consistent with what the price editor thinks it knows.
>>>>
>>>> Is there a limit on FX rates? (This is about 4000, which doesn't strike
>>>> me as terribly large.)
>>>>
>>>> --
>>>>
>>>> Jeff Abrahamson
>>>
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>>
>> --
>>
>> Jeff Abrahamson
>> +33 6 24 40 01 57
>> +44 7920 594 255
>>
>> http://p27.eu/jeff/
>> http://transport-nantes.com/
>>
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>
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