[GNC] asset discrepancy in change of year

[Michael or Penny Novack]

>
>
> That could be interesting for 2021 since I bought quite a few USD to 
> invest in a mutual fund but for 2020 there are just 2 currency 
> conversion and nothing large enough to "hide" a profit of 22.8 EUR.  
> In 2020 I only bought funds in EUR and not sold anything. No sale, 
> nothing to record, right? 

There is an issue with keeping multiple currencies in the same set of 
books that I have not yet seen discussed in detail, Namely that exchange 
rates are not constant over time.

Let's say at time T when the exchange rate between $ and EUR is 
$1.30/1.00 EUR. You take 1000 EUR and buy 1300 dollars. At THIS point in 
time, just a transfer between assets, no transaction affecting 
income/expense, so no affect on equity. Let's say no transactions from 
then on.

Now we come to the end of the year, at which point let's say the 
exchange rate is $1.25/1 EUR. Those $1300 are no longer worth 1000 Eur. 
They are worth 1040 EUR. Your equity has gone up by 40 EUR.

I will stop here because the issue of how "unrealized gains/losses from 
changes in exchange rate" will be treated is not a gnucash issue. It's 
exactly the same no matter what accounting software you use or even old 
fashioned pen and ink on paper.

Michael D Novack