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

[David Cousens]

Hi Andrea,

OK it is only  Euro and USD which makes it simpler. my apologies for the
delay in replying. I was away from home yesterday,

If I read it correctly you will have paid originally in totally €320.44 for
the laptop (€313.21 cost of the laptop + US$7.23 shipping/commission fees,
which would have been a total cost in € which was presumable expensed
against Costi:Euro:Elettronica/Fotografia in the purchase transaction.

As far as I can tell the transactions recorded in 01,02,03 and 04 are
correct .  The transactions in 04 seem to be viewed from the paypal:usd
register , i.e. all the amounts will be shown in USD not €. 

You seem to have setup separate expense accounts for € and US$  and the US$
expense account will have no initial charge to it that is to be reversed by
the reimbursement by the reimbursement as that is recorded in the € expense
account you initially charged the purchase against.

In that case the final closing  transaction recording the amount refunded
US$6.54 should have been not from Capitale:Dollari but should have been from
the Costi:Euro:Elettronica/Fotografia EURO account and have involved a
currency exchange at the price for the currency when the refund was made.
Entering the multi-currency transactions is a little tricky but is  covered
in the help manual and guide. Have you set the currencies for the USD
accounts to USD in the account new or edit dialog.  If you then enter the €
and US$ amounts against the relevant accounts in the transaction GnuCash
should then calculate the exchange rate and enter it in the price database.
The refund will now be recorded as a reversal of the original expense. 

Technically it would have been better to have recorded that at the time of
the refund not during the closing operation by using a multicurrency
transaction refund to Costi:Euro:Elettronica/Fotografia rather than
Costi:Dollari:Elettronica/Fotografia in 04  which would have forced the
currency exchange at that point. Then in 06 you would only have to close the
fees and commissions $0.69 to Risultatao:Dollari.  

My preference would be to keep all expense accounts in € (including the fees
and commissions) and force the currency conversions at the time they
occurred in 04. Then there would be no closing transactions from any foreign
currency accounts. Whether this is possible for you may depend on your
jurisdictional rules for recording  transactions in foreign currencies. You
may need to consult a local accountant to advise you on this.

I have similar transactions with Paypal from $AUD to $USD when I make
purchases from the US or in USD from Europe in Euro. My books are no longer
for business, just personal so I record all of my Paypal transactions in AUD
converted from the USD amounts and these transactions are infrequent for me.
Paypal in Australia operates in AUD, even if the refund was in USD Paypal 
would have converted it back to AUD as it maintains all my account balances
in AUD but in the past when my PayPal account was operated from PayPal out
of the US similar transactions did occur occasionally.

David



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David Cousens
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