[GNC] How to Realized Gain/Loss when turned on trading account ?

[David Cousens]

Long

 I found that setting up the transfers makes a lot more sense using the
toolbar Transfer icon or the Menu->Actions->Transfer as you are more easily
able to setup the debits, credits and the accounts and the exchange rate
seems to work a bit more naturally and uses a different dialog

I was then able to create a trading account balance with a transfer to USD
and back at a slightly different exchange rate, in my case a loss of 0.26
which showed up as Trading Losses in the Balance Sheet.  I think the Trading
accounts are protected against manual transaction entries to them
deliberately.  The values in them will automatically be recorded in the
Balance Sheet as Trading Gains or Losses and my guess is they are recorded
in the book currency in the Balance sheet.  If you then create an Income
Statement report the trading account balances will then show up in that as
Realized Gains and Losses.  It does work! I'll try and do the 5.1 table
exercise later.

GnucCash can be used in two ways. Accountants traditionally when using pen
and paper physically closed the book and created a new physical set of books
at the end of each accounting procedure. They used a close books procedure
in which one of the steps would have been to adjust any residual unrealized
gains to the actual gain during the recording of the sale  and then transfer
the actual gain and loss to a Realized gains and Losses Account. 

GnuCash can be operated in this manner with trading accounts turned off but
you have to manually generate all the entries and use a close books process
to transfer the income and expense account balance to an Equity:Retained
earnings account.

Because all of the data exists and can be easily manipulated in a program,
GnuCash can also be used in a mode where you dont carry out any close books
procedure and the program automatically calculates the balances for
unrealized gains and losses and includes them appropriately labelled in the
Balance Sheet and Income Statement (and other reports as appropriate). There
was some discussion a year or two ago about unrealized gains and how they
appeared in the balance sheet in either the DEV forum or the User forum.
Chris Lam was doing a rewrite and updating the user reports and creating a
lot of new reports at the time. There was a lot of effort to ensure the
reports were compatible with both ways of using GnuCash. If you search back
through the archives you might find that thread.

David



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David Cousens
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