Keep in mind that the way your UK broker holds US commodities at cost in GBP is exactly how HMRC wants you to report your capital gains: https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg78310
I have an opposite problem. I mostly use a US broker, but still have to account for any gains using UK tax rules. > On 2 May 2021, at 11:37, Caesar Schinas <[email protected]> wrote: > > > Interesting. I'll have to have a play with that idea and see what I can come > up with that makes sense. > > From my own accounting point of view the main requirements are: > 1. My profit/loss must be in GBP, as that's the currency of the account and > the currency I pay tax in. > 2. The commodity price should be denominated in its native currency (USD) so > that I can fetch prices and see my unrealized gains/losses (converted back to > GBP at current rates if I so desire) over time. > > Regarding your point (a): My account is in GBP and I never see the USD as > they are converted by my broker as part of the purchase/sale transaction (at > the time of the purchase, their accounting reports didn't even contain the > USD price) – but obviously, it's a USD-denominated commodity and it doesn't > make sense to try and denominate it in GBP in my ledger. > > Accounting for the sale as two transactions is a very interesting idea. I'm > struggling to mentally imagine how it would look (subject to my constraint 1 > above), though maybe it will become clear if I play around with it a bit. > Maybe I use an equity account for the temporary (imaginary?) USD holding? > Where does the FX loss (or profit) get accounted for? At some point it needs > to be offset against my P/L from selling the shares so I end up with the > correct overall profit/loss in GBP. > Do you think you could share an example of how you envisage booking this as > two separate transactions? > > Thanks! > > >> On 2 May 2021, at 02:15, [email protected] <[email protected]> wrote: >> >> Setting aside beancount for a second, >> a) what cost currency was the commodity held in? I.e., what currency was it >> purchased and sold against? >> b) it seems like a good way to think about this sale is two transactions: a >> sale of S_SQ, and a subsequent currency conversion. Do you think that's a >> good model? If so, I'd recommend starting by splitting it into those two >> transactions in your ledger, which should lead to clarity. >> >>> On Saturday, May 1, 2021 at 1:59:37 PM UTC-7 [email protected] wrote: >>> I think I now understand what's going on here. >>> >>> It's actually simple: because the commodity is priced in USD, Beancount is >>> naturally calculating my profit in USD. >>> The result is 1338.43 USD – which, at the current exchange rate on the sale >>> date, is 1015.35 GBP. >>> >>> But because I actually made the transactions in GBP, and the exchange rate >>> has changed in the meantime, my actual profit is different (977.88 GBP). >>> >>> I'm not sure what the cleanest way is to resolve this. At present I can >>> think of two options: >>> >>> 1. Use a 'false' FX rate for the profit/loss leg of the transaction, such >>> as by using Beancount's @@ syntax. >>> Example: >>> Income:Investments:PnL -977.88 GBP @@ 1338.43 USD >>> At first glance this seems quite elegant, but one disadvantage is that it >>> will result in incorrect entries in the prices database for GBP/USD. >>> >>> 2. Add another leg for FX gains/losses (I'm not sure if Expenses is the >>> right category) >>> Example: >>> Income:Investments:PnL -977.88 GBP @ 1.31820 USD >>> Expenses:Financial:FXGainLoss -37.46 GBP @ 1.31820 USD >>> The problem with this is that it looks like I made a profit on the FX >>> difference, when I actually made a loss. I'm not sure how to resolve that. >>> >>> Does anyone have any better ideas? >>> >>> >>>> On Sat, 1 May 2021 at 20:54, Caesar Schinas <[email protected]> >>>> wrote: >>>> Apologies, I made a minor error in my last message – my arithmetic doesn't >>>> add up because I omitted to account for the FX fee of 6.60 GBP. >>>> The point remains: the much larger 'error' of 49.38 GBP is unaccounted for. >>>> >>>>>> On Saturday, 1 May 2021 at 20:46:45 UTC+1 Caesar Schinas wrote: >>>>>> But that's the thing: my income wasn't 1015.34 GBP, it was 977.88 GBP. >>>>>> That is the difference between the amount of 482.60 GBP that was debited >>>>>> from my account when I bought the shares, and the amount of 1467.08 GBP >>>>>> that was credited to my account when I sold the shares. >>>>>> >>>>>> So something else is amiss. But I can't work out what. (Unless it's >>>>>> totally incorrect exchange rates from my broker. But their web interface >>>>>> shows the same figures as the CSV from which I extracted the above data, >>>>>> and I'm loath to 'massage' the rates just to make the numbers fit, >>>>>> without actually understanding what's wrong.) >>>>>> >>>>>> >>>>>>> On Saturday, 1 May 2021 at 20:18:53 UTC+1 [email protected] wrote: >>>>>>> Sale 11 175.81 1,933.91 >>>>>>> Cost 11 54.135 595.49 >>>>>>> 1,338.43 >>>>>>> >>>>>>> Proceeds 1467.08 1.3182 1,933.90 >>>>>>> PnL (1,015.34) 1.3182 (1,338.43) >>>>>>> 595.48 >>>>>>> >>>>>>> So you should have -1015.34 GBP as your Income, not -977.88 >>>>>>> >>>>>>> Of course, you would need an additional posting to absorb rounding >>>>>>> errors. >>>>>>> >>>>>>>> On Wednesday, April 28, 2021 at 5:14:40 PM UTC-7 >>>>>>>> [email protected] wrote: >>>>>>>> I've been using beancount for a while for my everyday transactions, >>>>>>>> but am only recently getting around to trying to import my trading >>>>>>>> activity to my ledger as it seems much more complex. >>>>>>>> >>>>>>>> I'm having trouble with accounting for profit/loss on shares which are >>>>>>>> priced in a currency different to the main currency of my trading >>>>>>>> account. >>>>>>>> >>>>>>>> My trading account is in GBP, but I often buy shares priced in USD. My >>>>>>>> broker handles the conversion, and charges me an FX fee as a >>>>>>>> percentage of the value of the trade. >>>>>>>> >>>>>>>> Here is an example: >>>>>>>> >>>>>>>> 2020-03-31 * "Buy 11 shares of Square" >>>>>>>> Assets:GB:Freetrade:GIA:Cash -482.60 GBP @ 1.23390 USD >>>>>>>> Assets:GB:Freetrade:GIA:SQ 11 S_SQ {54.13456 USD} >>>>>>>> >>>>>>>> ; ... >>>>>>>> >>>>>>>> 2020-11-16 * "Sell 11 shares of Square" >>>>>>>> Assets:GB:Freetrade:GIA:Cash 1467.08 GBP @ 1.31820 USD >>>>>>>> Assets:GB:Freetrade:GIA:SQ -11 S_SQ {54.13456 USD} @ >>>>>>>> 175.81000 USD >>>>>>>> Assets:GB:Freetrade:GIA:Cash -6.60 GBP >>>>>>>> Expenses:Financial:Fees 6.60 GBP >>>>>>>> Income:Investments:PnL -977.88 GBP @ 1.31820 USD >>>>>>>> >>>>>>>> All the figures are from my broker's reports, except for the profit >>>>>>>> calculation. >>>>>>>> For the profit I have simply subtracted the GBP purchase price from >>>>>>>> the GBP sale price, as this is the actual amount of profit I made (the >>>>>>>> actual net change in my account balance). >>>>>>>> >>>>>>>> However, the second transaction does not balance: >>>>>>>> Transaction does not balance: (49.3832800 USD) >>>>>>>> >>>>>>>> I am struggling to understand where the extra 49.3832800 USD came >>>>>>>> from (or went?), or how I can balance this transaction. >>>>>>>> >>>>>>>> I'm quite new to this. Can anyone give me any tips? >>>>> >>>>> >>>> -- >>>> You received this message because you are subscribed to a topic in the >>>> Google Groups "Beancount" group. >>>> To unsubscribe from this topic, visit >>>> https://groups.google.com/d/topic/beancount/3Bp4ZgnqOvY/unsubscribe. >>>> To unsubscribe from this group and all its topics, send an email to >>>> [email protected]. >>>> To view this discussion on the web visit >>>> https://groups.google.com/d/msgid/beancount/20b40ee8-50cd-436b-b402-e5e22e6ede11n%40googlegroups.com. >> >> >> -- >> You received this message because you are subscribed to a topic in the >> Google Groups "Beancount" group. >> To unsubscribe from this topic, visit >> https://groups.google.com/d/topic/beancount/3Bp4ZgnqOvY/unsubscribe. >> To unsubscribe from this group and all its topics, send an email to >> [email protected]. >> To view this discussion on the web visit >> https://groups.google.com/d/msgid/beancount/f0c5845b-793b-440f-be43-ca858d30256en%40googlegroups.com. > > -- > You received this message because you are subscribed to the Google Groups > "Beancount" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected]. > To view this discussion on the web visit > https://groups.google.com/d/msgid/beancount/58F07E0D-F708-4607-9C15-A7A0F178A0ED%40caesarschinas.com. -- You received this message because you are subscribed to the Google Groups "Beancount" group. 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