[GNC] Why does an Equity account have to be of Currency type?
David Long
davidvernonlong at gmail.com
Wed Apr 27 12:19:50 EDT 2022
Hi Ken,
Re your reply to Michael below, I can help with the accounting, because
this has to be understood before how to use any financial accounting system
, like GnuCash, can be used.
In any set of financial accounts, including those where the system is based
on handwritten ledgers (how I started in the 70s), the business has to
decide in which currency it is going to report in, normally the country of
its residence but not always. This could indeed be in yards of lumber, or
whatever the Robinson Crusoe Island decides.
It would then produce a profit and loss account with a net income in X
yards of lumber, and a balance sheet where debit equals credits in yards or
lumber, or in other words ,where Assets in yards of lumber = Liabilities
in yards of lumber plus Equity in yards of lumber.
If an equity holder were to contribute to his equity account in bananas,
you could indeed open an equity account in the books of account in bananas.
If one yard of lumber was equal to a hundred bananas at the time of the
transaction,and he contributed a thousand bananas then his equity account
would be denominated in yards of lumber and its value would be 10. (yards
of lumber). If you were hoping to have an equity account showing one
thousand bananas, this could never work. It has to be denominated in the
entities reporting currency, not bananas. This would be the only way of
having a balance sheet and P&L account in the reporting currency of yards
of lumber which adds up. That would be the case in any financial accounting
system. This can of course be done in GnuCash as Michael suggests by using
the $ symbol for yards of lumber or whatever.
You would have to keep a separate memo reporting outside of the financial
reporting system to record that your banana equity account of 10 is
represented by 1000 bananas.
To take a more mundane example, if you take a US company reporting in USD,
and a foreign investor buys some stock with Euros, that purchase will
always be translated into USD and they will have X USD denominated stock
(maybe 1USD $ nominal value) and will have to keep their own record of how
many euros they paid.
Hope this helps
David
Your message to Michael below:
Hi Michael,
I agree - I could change the definition of $ for the purposes of the
Robinson Crusoe case. But let me ask the question a different way:
It seems that when trying to create an account of type Asset, Bank, Cash,
Credit Card, Liability, A/Receivable, A/Payable, Equity selecting the
denominated "Security/currency" only allows the user to select a Currency
Type.
For account types Stock and Mutual Fund the "Security/currency" is only
allowed to be of a Non-Currency Type.
Why is that restriction necessary? Why can't you have a Bank account that
is denominated in silver taels*? Or a cash account denominated in "Disney
Dollars"? Or contribute Equity to a business in the form of yards of
lumber?
Perhaps the answer is to simply use a "Stock" account type for my asset
examples? But there is no workaround for the equity example. And it seems
like an artificial limitation within the software - unless I am missing the
reason this should not be permitted (either from an software implementation
or accounting perspective).
Thanks,
Ken
On Wed, Apr 27, 2022 at 12:01 AM <gnucash-user-request at gnucash.org> wrote:
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> Today's Topics:
>
> 1. Linux. Mysql and Gnucash 4.1 (grant)
> 2. Re: Linux. Mysql and Gnucash 4.1 (Chris Green)
> 3. Re: Linux. Mysql and Gnucash 4.1 (grant)
> 4. Re: Why does an Equity account have to be of Currency type?
> (Frank H. Ellenberger)
> 5. Re: Flathub does not install Gnucash ver. 4.10 flatpak, but
> only installs lower ver. 3.7 (parag puranik)
> 6. Re: Flathub does not install Gnucash ver. 4.10 flatpak, but
> only installs lower ver. 3.7 (Frank H. Ellenberger)
> 7. Re: Flathub does not install Gnucash ver. 4.10 flatpak, but
> only installs lower ver. 3.7 (parag puranik)
> 8. Re: Why does an Equity account have to be of Currency type?
> (km22)
> 9. How to manage multiple accounts (as in separate gnucash
> databases)? (Chris Green)
> 10. Help with GnuCash's 'help' (Chris Green)
>
>
> ----------------------------------------------------------------------
>
> Message: 1
> Date: Tue, 26 Apr 2022 18:36:30 +1200
> From: grant <grant at ngapourihighlands.co.nz>
> To: gnucash-user at gnucash.org
> Subject: [GNC] Linux. Mysql and Gnucash 4.1
> Message-ID: <mailman.4.1650988802.4858.gnucash-user at gnucash.org>
> Content-Type: text/plain; charset=utf-8
>
> So I have rebuilt my laptop, recovered my databases and installed Gnucash
> 4.1 but I cannot connect to mysql databases. When I click file, open there
> is no option for mysql.?This is under Fedora 35Sent from my Galaxy
>
> ------------------------------
>
> Message: 2
> Date: Tue, 26 Apr 2022 09:28:02 +0100
> From: Chris Green <cl at isbd.net>
> To: gnucash-user at gnucash.org
> Subject: Re: [GNC] Linux. Mysql and Gnucash 4.1
> Message-ID: <YmetEmtz9hvj9Yes at esprimo>
> Content-Type: text/plain; charset=iso-8859-1
>
> On Tue, Apr 26, 2022 at 06:36:30PM +1200, grant wrote:
> > So I have rebuilt my laptop, recovered my databases and installed
> Gnucash
> > 4.1 but I cannot connect to mysql databases. When I click file, open
> there
> > is no option for mysql.?This is under Fedora 35Sent from my Galaxy
>
> I don't believe GnuCash works with mysql (or the equivalent mariadb),
> the only database storage option that I'm aware of is sqlite.
>
> --
> Chris Green
>
>
> ------------------------------
>
> Message: 3
> Date: Tue, 26 Apr 2022 20:42:39 +1200
> From: grant <grant at ngapourihighlands.co.nz>
> To: Chris Green <cl at isbd.net>, gnucash-user at gnucash.org
> Subject: Re: [GNC] Linux. Mysql and Gnucash 4.1
> Message-ID: <mailman.5.1650988802.4858.gnucash-user at gnucash.org>
> Content-Type: text/plain; charset=utf-8
>
> I worked it out in the end. Had to install the perl-DBI library etc and I
> am away.?Gnucash also works with postgres.?Sent from my Galaxy
> -------- Original message --------From: Chris Green <cl at isbd.net> Date:
> 26/04/22 20:29 (GMT+12:00) To: gnucash-user at gnucash.org Subject: Re:
> [GNC] Linux. Mysql and Gnucash 4.1 On Tue, Apr 26, 2022 at 06:36:30PM
> +1200, grant wrote:> So I have rebuilt my laptop, recovered my databases
> and installed Gnucash > 4.1 but I cannot connect to mysql databases. When I
> click file, open there > is no option for mysql.?This is under Fedora
> 35Sent from my Galaxy I don't believe GnuCash works with mysql (or the
> equivalent mariadb),the only database storage option that I'm aware of is
> sqlite.-- Chris
> Green_______________________________________________gnucash-user mailing
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> ------------------------------
>
> Message: 4
> Date: Tue, 26 Apr 2022 12:33:31 +0200
> From: "Frank H. Ellenberger" <frank.h.ellenberger at gmail.com>
> To: stepbystepfarm at comcast.net
> Cc: gnucash-user at gnucash.org
> Subject: Re: [GNC] Why does an Equity account have to be of Currency
> type?
> Message-ID: <f680e4e9-f2c1-8120-b203-86b5bcac9df9 at gmail.com>
> Content-Type: text/plain; charset=UTF-8
>
> Hi,
>
> just for completeness ?
>
> Am 25.04.22 um 19:17 schrieb Michael or Penny Novack:
> > The fact that other people in other lands understand $ to stand for USD
> > is irrelevant to island life.
>
> The origin of the word is
> https://en.wikipedia.org/wiki/Tolar
> and the symbol
> https://en.wikipedia.org/wiki/Dollar_sign#History
>
> Regards
> Frank
>
>
> ------------------------------
>
> Message: 5
> Date: Tue, 26 Apr 2022 11:27:45 +0000 (UTC)
> From: parag puranik <parag_puranik at yahoo.com>
> To: "Frank H. Ellenberger" <frank.h.ellenberger at gmail.com>
> Cc: "gnucash-user at gnucash.org" <gnucash-user at gnucash.org>
> Subject: Re: [GNC] Flathub does not install Gnucash ver. 4.10 flatpak,
> but only installs lower ver. 3.7
> Message-ID: <1776937157.1416109.1650972465759 at mail.yahoo.com>
> Content-Type: text/plain; charset=UTF-8
>
> Outputs of commands:
>
> (1) $ flatpak --supported-arches
> i386
>
> (2) $ flatpak remotes -d
> Name??? Title?? URL????????????????????????? Collection ID Priority Options
> flathub Flathub https://dl.flathub.org/repo/ -???????????? 1???????
> system
>
> (3) $ flatpak search gnucash
> Application ID????? Version Branch Remotes
> Description?????????????????????????????????? ?
> org.gnucash.GnuCash 3.7+??? stable flathub Manage your finances, accounts,
> and investments
> org.kde.skrooge???????????? stable flathub Personal Finances
>
> On Tuesday, 26 April, 2022, 06:38:31 am IST, Frank H. Ellenberger <
> frank.h.ellenberger at gmail.com> wrote:
>
> Hi,
>
> please send the output of the following commands:
> flatpak --supported-arches
> flatpak remotes -d
> flatpak search gnucash
>
> Perhaps we can so get a clue of your problem.
>
> Regards
> Frank
>
> Am 25.04.22 um 15:23 schrieb parag puranik via gnucash-user:
> > The first Flathub release (for 32 bit OS) was not ver 3.11 ( it could be
> earlier version), since I have installed ver. 3.7 on my 32 bit OS.
> > That said, my conclusion is : Flathub installs ver. 3.7 on 32 bit
> systems (that could be last ver. offerred by Flathub for i386).
> > To get higher versions than 3.7, you have to look out providers other
> than Flathub.
> > Can someone help me identify providers other than Flathub for a higher
> version flatpak for i386 systems ?
> >
> > Sent from Yahoo Mail on Android
>
>
> ------------------------------
>
> Message: 6
> Date: Tue, 26 Apr 2022 13:41:26 +0200
> From: "Frank H. Ellenberger" <frank.h.ellenberger at gmail.com>
> To: parag puranik <parag_puranik at yahoo.com>
> Cc: "gnucash-user at gnucash.org" <gnucash-user at gnucash.org>
> Subject: Re: [GNC] Flathub does not install Gnucash ver. 4.10 flatpak,
> but only installs lower ver. 3.7
> Message-ID: <5d424871-9c3c-9667-8197-95a14f9f9449 at gmail.com>
> Content-Type: text/plain; charset=UTF-8
>
> Hi,
>
> Flatpak tries to be smart. So the interesting parts of 2 and 3 were
> shortened away. Can you redo them in a full screen window or by
> redirecting into a file like:
>
> flatpak remotes -d >fp-state
> flatpak search gnucash >>fp-state
>
> Regards
> Frank
>
> Am 26.04.22 um 13:27 schrieb parag puranik:
> > Outputs of commands:
> >
> > (1) $ flatpak --supported-arches
> > i386
> >
> > (2) $ flatpak remotes -d
> > Name??? Title?? URL????????????????????????? Collection ID Priority
> Options
> > flathub Flathub https://dl.flathub.org/repo/ -???????????? 1???????
> system
> >
> > (3) $ flatpak search gnucash
> > Application ID????? Version Branch Remotes
> Description?????????????????????????????????? ?
> > org.gnucash.GnuCash 3.7+??? stable flathub Manage your finances,
> accounts, and investments
> > org.kde.skrooge???????????? stable flathub Personal Finances
>
>
> ------------------------------
>
> Message: 7
> Date: Tue, 26 Apr 2022 12:13:19 +0000 (UTC)
> From: parag puranik <parag_puranik at yahoo.com>
> To: "Frank H. Ellenberger" <frank.h.ellenberger at gmail.com>
> Cc: "gnucash-user at gnucash.org" <gnucash-user at gnucash.org>
> Subject: Re: [GNC] Flathub does not install Gnucash ver. 4.10 flatpak,
> but only installs lower ver. 3.7
> Message-ID: <697358092.1433305.1650975199998 at mail.yahoo.com>
> Content-Type: text/plain; charset=UTF-8
>
> There is no output of both the commands, The screen of terminal looks
> like ::~$ flatpak remotes -d >fp-state
> :~$ flatpak search gnucash >>fp-state
> :~$
> I am getting increasingly sure that i386 versions of flatpaks, which I
> have- i.e.? "1.0.9-0ubuntu0.4" is limited to pulling Gnucash ver 3.7 at the
> maximum from Flathub, not beyond that. Like last supported vercion of
> Gnucash on Win 7 is 3.11, last 32 bit version supported on Linux 32 bit is
> Ver. 3.7
> Flatpak itself cannot be be upgaded to a newer version. Hence for Flatpak
> ver. 1.0.9 the last supported version of Gnucash could be? ver. 3.7.
>
> On Tuesday, 26 April, 2022, 05:11:30 pm IST, Frank H. Ellenberger <
> frank.h.ellenberger at gmail.com> wrote:
>
> Hi,
>
> Flatpak tries to be smart. So the interesting parts of 2 and 3 were
> shortened away. Can you redo them in a full screen window or by
> redirecting into a file like:
>
> flatpak remotes -d >fp-state
> flatpak search gnucash >>fp-state
>
> Regards
> Frank
>
> Am 26.04.22 um 13:27 schrieb parag puranik:
> >? Outputs of commands:
> >
> > (1) $ flatpak --supported-arches
> > i386
> >
> > (2) $ flatpak remotes -d
> > Name??? Title?? URL????????????????????????? Collection ID Priority
> Options
> > flathub Flathub https://dl.flathub.org/repo/ -???????????? 1???????
> system
> >
> > (3) $ flatpak search gnucash
> > Application ID????? Version Branch Remotes
> Description?????????????????????????????????? ?
> > org.gnucash.GnuCash 3.7+??? stable flathub Manage your finances,
> accounts, and investments
> > org.kde.skrooge???????????? stable flathub Personal Finances
>
>
> ------------------------------
>
> Message: 8
> Date: Tue, 26 Apr 2022 22:35:09 +0800
> From: km22 <km22 at gmx.com>
> To: gnucash-user at gnucash.org, stepbystepfarm at comcast.net
> Subject: Re: [GNC] Why does an Equity account have to be of Currency
> type?
> Message-ID: <79f41237-3186-8e4c-a22e-e627d6d73221 at gmx.com>
> Content-Type: text/plain; charset=UTF-8; format=flowed
>
> Hi Michael,
>
> I agree - I could change the definition of $ for the purposes of the
> Robinson Crusoe case. But let me ask the question a different way:
>
> It seems that when trying to create an account of type Asset, Bank, Cash,
> Credit Card, Liability, A/Receivable, A/Payable, Equity selecting the
> denominated "Security/currency" only allows the user to select a Currency
> Type.
> For account types Stock and Mutual Fund the "Security/currency" is only
> allowed to be of a Non-Currency Type.
>
> Why is that restriction necessary? Why can't you have a Bank account that
> is denominated in silver taels*? Or a cash account denominated in "Disney
> Dollars"? Or contribute Equity to a business in the form of yards of
> lumber?
>
> Perhaps the answer is to simply use a "Stock" account type for my asset
> examples? But there is no workaround for the equity example. And it seems
> like an artificial limitation within the software - unless I am missing the
> reason this should not be permitted (either from an software implementation
> or accounting perspective).
>
> Thanks,
> Ken
>
>
>
> * Yes, I could use this ISO currency XAG but that price typically refers
> to troy ounces and it might be that I want to mark the bid price of a
> silver savings account at a premium or discount to the XAG price.
>
>
> P.S. For some reason I am not receiving replies direct to my email so I am
> copying and pasting from the GnuCash archive below.
>
>
>
> Date: Mon, 25 Apr 2022 13:17:08 -0400
> From: Michael or Penny Novack
> To:gnucash-user at gnucash.org
> Subject: Re: [GNC] Why does an Equity account have to be of Currency
> type?
> Message-ID:<521f2821-4532-0ac2-81a2-4a4f9400cdc8 at comcast.net>
> Content-Type: text/plain; charset=UTF-8; format=flowed
>
>
> > But question is more general.? Let's say I join Robinson Crusoe on a
> > remote island and we decide our economy will be denominated in silver
> > coins (of which I had 12 in my pocket when I washed ashore on his
> > island).? If I were to do my accounting in GnuCash I would need to start
> > with an Opening Balance of 12 coins (my first transaction would need to
> > be Assets:Coins 12, Equity:Opening Balance 12), Gnucash does not let me
> > do this.? The software will only allow the Equity accounts to be of ISO
> > currency type.? Why not let the user denominate an Equity account in any
> > asset they like - silver coins if that is what they want?
>
> It DOES allow this if you refuse to accept the magical meaning of "$"
> (or any other symbol).
>
> Declare a law on the island, "$ is the symbol for a silver coin".? The
> fact that other people in other lands understand $ to stand for USD is
> irrelevant to island life. You are acting as if it made a difference in
> algebra whether you used "X"or "Y" to stand for an unknown variable.
>
> But you are actually wanting something else. You are wanting in one set
> of books more than one type of currency? at the same time. That gnucash
> does not support, but that is more a limitation of accounting than of
> gnucash. You CAN be accounting for more than one sort of :currency" at
> the same time, but if not exchangeable, not in the same set of books <<
> guncash will let you have any number of books >>
>
> Michael D Novack
>
>
>
> On 25/4/2022 22:24, km22 wrote:
> >
> > Hi Jim,
> >
> > In the end, I have decided to simply treat my mock trust or mock
> > company with a cash equity injection.
> >
> > But question is more general.? Let's say I join Robinson Crusoe on a
> > remote island and we decide our economy will be denominated in silver
> > coins (of which I had 12 in my pocket when I washed ashore on his
> > island).? If I were to do my accounting in GnuCash I would need to
> > start with an Opening Balance of 12 coins (my first transaction would
> > need to be Assets:Coins 12, Equity:Opening Balance 12), Gnucash does
> > not let me do this. The software will only allow the Equity accounts
> > to be of ISO currency type.? Why not let the user denominate an Equity
> > account in any asset they like - silver coins if that is what they want?
> >
> > Thanks,
> >
> > Ken
> >
> > P.S. Please excuse this badly formatted email - I had to copy and
> > paste your text from the Archive as I seem to have deleted the
> > original reply.
> >
> >
> > ------------------------------
> >
> > Message: 8
> > Date: Sat, 23 Apr 2022 13:05:04 -0700
> > From: Jim DeLaHunt<list+gnucash at jdlh.com>
> > To:gnucash-user at gnucash.org
> > Subject: Re: [GNC] Why does an Equity account have to be of Currency
> > type?
> > Message-ID:<29e7cc91-fdb1-ccb9-daf2-f5e177392124 at jdlh.com>
> > Content-Type: text/plain; charset=UTF-8; format=flowed
> >
> > On 2022-04-23 02:46, km22 wrote:
> >
> >> ?I am starting a new Gnucash file for a simple "mock" trust.? The trust
> >> holds physical assets (like stamps and coins and other collectibles).? I
> >> want to represent the contributions to this trust in the form of these
> >> assets.? However, when I try to create new Equity accounts for the
> >> contributions it only allows me to use "Currency" type assets.?
> > Your Gnucash usage question leads me to an accounting question. And I am
> > not an accountant, so my ignorance is likely vast. However?
> >
> > Why should the accounts which track the physical assets be Equity
> > accounts?? Why not make them Asset accounts?
> >
> > And then, David Cousens points out that what you need to track physical
> > assets is an inventory application, and GnuCash is not an inventory
> > application. How does that inform your use of GnuCash?
> >
> >
> >
> >
> > ------------------------------
> >
> >
> > On 23/4/2022 17:46, km22 wrote:
> >> Hi,
> >>
> >> I am starting a new Gnucash file for a simple "mock" trust.? The
> >> trust holds physical assets (like stamps and coins and other
> >> collectibles).? I want to represent the contributions to this trust
> >> in the form of these assets.? However, when I try to create new
> >> Equity accounts for the contributions it only allows me to use
> >> "Currency" type assets.? I don't understand why Gnucash would force
> >> this limitation.? Why wouldn't a user be allowed to use any asset
> >> type they wish (stocks, bitcoin, collectables) and not solely the ISO
> >> cash types?
> >>
> >> A screenshot of the issue is attached.
> >>
> >> Thanks,
> >>
> >> Ken
> >>
>
>
> ------------------------------
>
> Message: 9
> Date: Tue, 26 Apr 2022 16:25:02 +0100
> From: Chris Green <cl at isbd.net>
> To: gnucash-user at gnucash.org
> Subject: [GNC] How to manage multiple accounts (as in separate gnucash
> databases)?
> Message-ID: <YmgOzscwD7lQl321 at esprimo>
> Content-Type: text/plain; charset=us-ascii
>
> I have several gnucash accounts files (sqlite databases in my case)
> spread around my system. When I go to a specific directory and run
> GnuCash I just want it to see only the database[s] in that directory.
>
> Is there a way I can tell gnucash to forget about all previous files
> it has opened? As it is I get presented with a 'memory' of other
> accounts which can be very confusing unless I'm very careful with file
> naming.
>
> The --nofile option tells gnucash not to open the last accounts
> database, it helps a little, but I really want it to forget more!
>
> --
> Chris Green
>
>
> ------------------------------
>
> Message: 10
> Date: Tue, 26 Apr 2022 16:35:50 +0100
> From: Chris Green <cl at isbd.net>
> To: gnucash-user at gnucash.org
> Subject: [GNC] Help with GnuCash's 'help'
> Message-ID: <YmgRVj6d7OBQm4VD at esprimo>
> Content-Type: text/plain; charset=us-ascii
>
> Maybe I'm missing something obvious but when I search for something in
> GnuCash's help I often can't see what I've searched for.
>
> For example I just searched for 'open account' and it returns five
> headings - but when I open one of them (for example General
> Information Tab) I can't find the string 'open account' anwhere in
> there.
>
> --
> Chris Green
>
>
> ------------------------------
>
> Subject: Digest Footer
>
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> ------------------------------
>
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