2022-10-30 GnuCash IRC logs

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06:19:46 <dwg> fell, uh... I've read that section, but I am still confused. The only different currency account I have is an expense account.
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07:25:45 <fell> dwg: or some other commodities like stocks…
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07:52:18 <dwg> fell, nope, none of those either. there are two asset accounts, both are cash in the default currency
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07:55:45 <fell> Then I suspect it is caused by your expense account and different exchange rates.
07:58:36 <fell> BTW income and expense accounts in a foreign currency should only exist temporary and become closed into your domestic income/expense.
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08:34:51 <dwg> fell, huh. ok. that seems weird. this is just a regular bill that's always the same amount in USD, but obviously varies in AUD
08:42:49 <dwg> fell, should that just be done as a local currency expense account, with the value varying each time?
08:48:50 <fell> Assuming you get invoiced for USD 100, you bank will transfer sometimes AUD 150 or AUD 160
08:50:19 <fell> Then you should close your USD expense each time with your banks xfer rate against your AUD expense.
08:55:20 <dwg> fell, right, I'm not sure what "close" means in this context
08:55:46 <fell> bring the sum to zero
08:56:13 <dwg> the sum of..?
08:56:28 <fell> the account
08:56:30 <dwg> I'm already setting the exchange rate on each transaction so that the AUD amount is correct
08:57:02 <dwg> ok.. and that would be done with a transaction to.. where?
08:57:50 <fell> expense:…:USD ->expense:…:AUD
08:58:15 <dwg> sorry, I'm still confused
08:58:36 <dwg> oh, so I have both a local and foreign currency expense account
08:59:16 <fell> right
08:59:27 <dwg> the bill first appears as a transfer with exchange rate between the two expense accounts
08:59:40 <dwg> then as a local currency transfer from the bank to the local currency expense account?
08:59:54 <dwg> what's the rationale for such an arrangement?
09:01:31 <fell> This wa you could create a scheduled transaction about 100 USD—a reminder for your coming expenses.
09:01:46 <fell> way
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09:03:22 <fell> bot finally you want all your expenses in AUD.
09:12:11 <dwg> ok.. but what does this capture, that transferring directly from bank to the foreign currency expense account doesn't?
09:21:06 <fell> Only some automatization
09:24:25 <fell> Easier is it done by dropping the USD account and directly enter the transfered amount into the corresponding AUD account.
09:25:47 <fell> you could add a note into the account's description or notes field "Formally USD 100 each month"
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11:44:10 <Kaligula> When upgrading from GnuCash v3 to v4 – do I have to uninstall previous verrsion?
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11:45:34 <Kaligula> I'm using v3.11 and planning to go on v4.12.
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12:35:04 <fell> Kaligula: The Windows installer or your Linux software manager will do it for you.
12:36:40 <fell> But in general you should save a backup of your data and perhaps settings in case something went wrong.
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12:46:35 <Kaligula> That's what I did, thank you, fell :)
12:46:44 <Kaligula> (the backup)
12:48:00 <fell> BTW I confirmed your account.
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12:48:30 <Kaligula> wiki?
12:48:52 <Kaligula> yay! \o/ Thank, fell
12:48:57 <Kaligula> Thanks*
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16:11:04 <jralls> dwg: I think fell assumed that you understand currency exchange a bit more than you seem to. So:
16:11:30 <jralls> 1. Everything in GnuCash has to balance in your home currency, AUD.
16:12:43 <jralls> 2. If left to itself, GnuCash will attempt to do that balancing at the most recent exchange rate it knows about, so if you have three splits in your expenses:USD account GnuCash will value all three at the last exchange rate.
16:13:57 <Simon> it also depends on exactly how you want to represent it - if all of the transactions are in AUD there is no need to record it in USD at all other than in the description
16:14:31 <jralls> Simon, please don't comment until I'm finished explaining.
16:16:14 <jralls> 3. The AUD values in the asset account correspond to the value in USD at the transaction's exchange rate. That creates a difference in AUD value between Assets and Expense, so GnuCash adds an Unrealized Capital Gain entry to balance it.
16:16:59 <jralls> 4. That's a calculated amount that only shows up in the Balance Sheet report.
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16:19:00 <jralls> More 4. You can tell the report to use average cost instead of nearest to report date and that will make the AUD value of the Expenses the same as the Assets and remove the Unrealized Gain entry.
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16:21:02 <jralls> 5. Or you can transfer the amounts in Expesnses:USD to Expenses:AUD at the average exchange rate, or in multiple transactions corresponding to the original ones and at the same exchange rate. That will accomplish the same thing.
16:22:32 <jralls> 6. Going forward, unless you have a need to keep track of the USD expenses in USD you can ignore the USD and just record the AUD amount in Expenses:AUD, saving yourself the trouble of transferring the USD expenses.
16:22:41 <jralls> OK, Simon, join in.
16:26:37 <Simon> I think you both keep using terms like "close" and "balance" that the average user may not be familiar with
16:27:32 <Simon> the issue appears to be that the value (in AUD) of the *total* USD Expenses is different from the value those expenses had at the time of the transaction
16:27:57 <Simon> and that there is only one USD account right now (for the expense)
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16:30:05 <Simon> (so either stop doing that or tell the report to use the right cost setting)
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20:32:15 <dwg> hrm.. ok.. I think I partly understand. when it tries to balance A+E=I+L it takes the USD expense total and converts back to AUD at a final calculated exchange rate, rather than using the exchange rate for each individual transaction
20:33:33 <dwg> I'm struggling to understand why that behaviour would ever be useful on an expense account (I can see why it makes sense on an asset account)
20:34:35 <dwg> then 2) why would having both an AUD and USD expense account and doing each payment in two stages alter that?
20:37:00 <dwg> I mean I guess the easy fix is just to not bother with the USD at all. I don't really need it, just seemed like it made sense to document the fact that it's a cross-currency payment and make it match up with the USD invoices more obviously
20:41:20 <dwg> Simon, jralls_afk ^
20:41:44 <chris> many users do use multi currency accounts
20:42:29 <chris> and it's nice that gnucash can report that there are unrecorded gains after the cross currency expense
20:42:39 <chris> how many accounting packages will do that?
20:50:22 <chris> you can have base account AUD, broker asset and fees account GBP, broker funds in UK stocks
20:50:33 <dwg> well, sure, that's great
20:50:53 <dwg> but it's totally unclear to me how these "gains" are calculated, because they'
20:50:59 <dwg> they're absolutely not real in my case
20:51:09 <dwg> the expense is paid, the exchange rate was what it was
20:51:23 <dwg> there's no getting it back and making some gain
20:56:55 <chris> as jralls said you can use average-cost
21:04:13 <dwg> chris, tried switching to that and the amount changed, but it's still non-zero :/
21:48:24 <chris> are you sure the start and end dates include all transactions?
22:08:02 <dwg> well, it's a balance sheet, so there's only one date
22:08:43 <dwg> and whether I pick today (after all transactions) or some earlier date, I seem to get (different) non-zero amounts
22:09:03 <dwg> in any case I want to get reports from prior dates
22:09:17 <dwg> chris, ^
22:12:31 <dwg> chris, another weird thing is that I have two cash/bank accounts, both of which have transactions to the foreign currency expense account. However only one of them shows this behaviour - if I exclude it, the unrealised gains entry disappears.