[GNC] Switching to trading accounts in existing database

[Christopher Lam]

Personally I'd stick with 1 book = 1 currency, and record all transactions
in their home currency only. I'd only record the same transaction in both
books if they're a formal currency transfer.

A simple issue is balance sheet: if you hold stocks eg TSLA in your USD
account, and ANA from your Japan account... the overall balance sheet in
USD will convert ANA->JPY->USD. This has a chance of being accurate if you
have *daily* USD/JPY prices. Most users don't.

On Fri, 22 Jan 2021 at 02:06, Lukas Haase <lukashaase at gmx.at> wrote:

> Hi Christopher,
>
> This is very sad. Sad for various reasons.
>
> I went over these documents previously (but did not read them thoroughly).
>
> My takeaway is:
> * Storing the conversion rate per transaction makes the accounting
> equation as a function of time inconsistent (but it is consistent for
> each snaphot in time).
> * Trading account accounts for these inaccuracies.
>
> My question was more why the trading accounts (which seem to me the
> cleaner, superior and better way) are not enabled by default.
>
> Also, can you comment a bit more why precicely this would be a major
> minefield? (If you know it, of course).
>
> Multiple databases are just extremely hard for some people (like me).
>
> Consider living for a couple of months to a year in a different place.
> There is just no way to separate this in a clean way without replicating
> all the transactions in different databases. BTDT.
>
> Also I moved multiple times. Even then, there is no clear cut: Initially
> I would use credit cards, ATM etc. from previous country. Even the first
> or second rent may be partially paid with funds from the previous
> location. It takes a few months until I could consider the books between
> two countries sufficiently separate. The only ways are a) Massive
> transaction Replication b) booking everything I pay with funds from old
> country into old database. But with my rent example, it gets very
> inconsistent how much I paid rent at the new place.
>
> Lastly, simple portfolio accounting (e.g. crypto currencies) if they are
> bought in different countries.
>
> I am curious what the potential mines are so I can try to avoid them.
>
> Lukas
>
>
>
> On 2021-01-21 20:20, Christopher Lam wrote:
> > Multicurrency is a major minefield.
> > Start from
> https://www.mathstat.dal.ca/~selinger/accounting/tutorial.html
> > and finish with
> > https://www.mathstat.dal.ca/~selinger/accounting/gnucash.html for the
> > background on trading accounts.
> >  From discussion with accountant, it would seem that the safest approach
> is
> > to have 1 book per home currency. When you move countries you'd be better
> > off with a new book with a new home currency. Taking temporary trips
> abroad
> > gets the currencies translated to home currency. AFAIU. IANAA YMMV.
> > https://techcrunch.com/2010/08/14/internet-must-be-true/
> >
> > On Fri, 22 Jan 2021 at 00:59, Lukas Haase <lukashaase at gmx.at> wrote:
> >
> >> Hi Mike,
> >>
> >> On 2021-01-21 02:24, Mike Alexander wrote:
> >>> On 19 Jan 2021, at 20:08, Lukas Haase wrote:
> >>>
> >>>> So I got recommended using trading accounts. But suddenly all my
> >>>> previous multi-currency transactions get a small grey box with a cross
> >>>> (hinting the transaction is inconsistent).
> >>>>
> >>>> How do I best deal with this?
> >>>> Is it possible to keep my old multi currency transactions as-is and
> >>>> use trading accounts only for securities/stocks?
> >>>>
> >>>> If not, how do I migrate while ensuring my ten years worth of data
> >>>> does not suddenly get inconsistent?
> >>>
> >>> You should be able to use the "Check & Repair" commands in the Actions
> >>> menu to add the trading account splits to existing transactions.  I
> >>> would certainly save a copy of my data before doing this, and try it on
> >>> a few transactions first.  Your situation is complex enough that it is
> >>> not unlikely that this won't do exactly what you want, but it's worth a
> >>> try assuming you have good backup.
> >>
> >> Thank you, I think that worked indeed.
> >>
> >> I still need to cross-check everything (at the first glance things look
> >> OK).
> >>
> >> So then I'd have a general question on the multi currency feature:
> >>
> >> 1.) Are "Trading Accounts" just an *alternative* way to handle multi
> >> currencies (and as such have nothing to do with "trading")?
> >>
> >> 2.) Trading Account seem to be way more powerful than storing the
> >> exchange rate in each transaction
> >>
> >> 3.) Why exactly aren't they enabled by default if they are so superior?
> >> Why let people my default use the way that makes things less consistent
> >> and error-prone?
> >>
> >> Thanks,
> >> Lukas
> >>
> >>
> >>
> >>
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