[GNC] Income Statement versus Transaction Report

[John Ralls]

See https://bugs.gnucash.org/show_bug.cgi?id=797796. It has a long and detailed discussion about handling foreign-currency investments. CDB-Man is a licensed accountant practicing in Vancouver, BC.

My take-away from that discussion is that GnuCash has painted itself into a corner by not enforcing the home-currency rules, particularly for Equity accounts, that CDB-Man explains there. Without that discipline it's very difficult to reconstruct the correct home-currency amounts to report, including especially the capital gains and losses from the foreign currency piece of the equation.

Unfortunately I also think that imposing those restrictions in a future version of GnuCash would create discontent that would make the recent complaints about quickfill seem like meek acceptance. In any case it's not on the agenda to do so. Users who have multiple-currency books will have to go learn the rules and impose the discipline on themselves; if they do so I'm reasonably sure that the Average Cost price source will then give correct and consistent (instead of the current merely consistent) results.

The PriceDB-based price sources can't, nor are they intended to, give correct results. They're what-if tools, as in "How much money in currency X would I have if I sold all of my investments and converted all of my cash to currency X today?". It's fun to do but not particularly meaningful.

Regards,
John Ralls




> On Jul 20, 2023, at 10:24 AM, Adrien Monteleone <adrien.monteleone at lusfiber.net> wrote:
> 
> Ah. Interesting conundrum.
> 
> Many moons ago that there was issue with some of the code for the various price options in reports. I don't recall the details, but I seem to remember that 'average' was thought to be the most accurate at the time, and there was discussion of removing the other options until they could be fixed/improved.
> 
> I'm not sure what progress has been made in that regard since.
> 
> In the meantime, I wonder what happens if you created additional splits (or separate transactions) between the two currencies - say from a USD income to a COP asset, with the accounts used just for reporting purposes. I would think you'd get your trading splits in that case, and can specify the proper FX. Then you'd have fixed transactions for the report which wouldn't need price conversion at all, since they would be in the transaction itself.
> 
> Of course, with the extra accounts, you'd need to exclude them from other reports like a Balance Sheet.
> 
> Regards,
> Adrien
> 
> On 7/20/23 12:11 AM, Fred Tydeman wrote:
>> I have Trading turned on.
>> The income accounts in question are using COP as their currency.
>> Transactions in those accounts do not show any splits for Trading.
>> Income in those accounts is coming from an Asset account that also is in
>> COP.
>> So, there is no conversion between COP and USD involved in that transaction.
> 
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