[GNC] closing of books and multiple currencies: a question on exchanges

[David Cousens]

Andrea,

It is not clear to me where the $6.54 in the paypal:usd account comes from.
I was assuming it was an existing balance at the time you made the purchase
in euros which resulted in Paypal transferring money from your USD paypal
balance to cover the purchase.  In that case there is no expense associated
with the $6.54 balance. It is the outcome of previous transactions. It will
also depend upon the base currency for your books which I would presume,
maybe incorrectly would be lire

The euro purchase you made could be recorded in a number of ways. E.g a
multisplit transaction
                                     Debit             Credit
Asset:paypal:euro                               xxx
Asset:paypal:usd                                 yyy
Expense:***                       zzz

where there are currency conversions from EUR and USD to the base currency
of your accounts and zzz=xxx (euro->base currency)+yyy(usd->base currency.

Alternatively you could record it as two separate transactions, one the
purchase and the second the transfer of funds between the paypal accounts in
euros and usd, i.e.
                                     Debit             Credit
Asset:paypal:euro                               xxx
Expense:***                   zzz
where xxx(euro->base currency)= zzz

and
                                     Debit             Credit
Asset:paypal:euro        aaa              
Asset:paypal:usd                                 bbb

where aaa = bbb(usd-> euro).

In either case the Expense entry only records the purchase price in your
base currency and there are no expense entries corresponding to the transfer
of funds so there is no conversion of expenses required. The above notation
( curr1->curr2) implies a conversion between the relevant currencies.

David



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David Cousens
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