Hey, thanks for the reply. I'm not an account and or a tax advisor, so everything I say is not legal advice.
Currency exchange rates are not an issue, from what I remember. The tax declaration happens once a year, and for any non EUR currency you either use the exchange rate of the transaction (hence the importance of recording 10.00 USD with the converted amount) for foreign currency transactions (this means that the foreign amount is settled in EUR at the transaction time, hence no special treatment is needed, but questions might arise how I got 9.32 EUR if there is no matching invoice); or you use the ECB exchange rate of the last day of the fiscal year for foreign currencies that are held in a bank account (so if I started my year with 100 EUR and 100 USD, later converted all my EUR to USD, by the end of the year I need to submit EUR report, hence I'll use the rate from ECB to estimate the EUR value of my USD money). This should answer the first part of your question. As for keeping books, I prefer to stay as documented as possible. So if I convert all my USD into EUR, I would record a transaction and will use the conversion rate offered by my bank/financial institution that will carry the conversion. This should answer questions like "how come you started with 100 EUR and 100 USD, and ended up with 300 EUR without any profit/loss?" Look at the books, and you will see that there was a conversion of 100 USD to 200 EUR at the rate offered by my bank. Nevertheless, I don't see a reason to convert currencies from an EU business standpoint, unless I do frequent, and big purchases in foreign currency. On Sunday, September 1, 2024 at 12:35:58 PM UTC+2 [email protected] wrote: > On Saturday, August 31, 2024 at 9:58:01 PM UTC+2 DK wrote: > > Two reasons, actually. The first one is that I get an invoice in USD. And > the second one is that I am pedantic, and want to keep a correct record in > my ledger. > > > > Understood. But I still think the syntax, proposed by me covers your > reasons > > 2024-08-01 txn "Some Service" "" > invoice: "xxx" > Assets:Wise:EUR -9.32 EUR > Expenses:MyComp:Operating:Software > note: "Declaration price was 10 USD" > > > But I also invite you to consider the following 2 issue, which you may > have to consider, when making business in multi-currency environment > > Specifically unrealized gains and losses, which come from changing > exchange rates as well as gains (but mostly losses), coming from exchange > of funds with the rate, different from the one of ECB > > Consider the following situation > > > plugin "beancount.plugins.auto_accounts" > > option "operating_currency" "EUR" > > 2024-01-01 price EUR 1.0 USD ; ECB exchange rate > > ; Here you have 2000 EUR in you balance sheet report > 2024-01-01 * "Opening balance " > Assets:US:Bank 1000 USD > Assets:EU:Bank 1000 EUR > Equity:Opening-Balances > > ; When the EUR / USD exchange rate changes, your net worth (when measured > in EUR) drops by 500 EUR. > ; Do you need to reflect this somehow in your books? If so, how? > 2024-01-02 price EUR 2 USD > > ; Now you decide to move all your USD to EUR, but the bank offers an > exchange rate, different from the ECB rate, which > ; decreases your net worth by another 100 EUR. > ; Do you need to reflect this somehow in your books? If so, how? > 2024-01-03 * "Move all USD from the US bank to the EU bank" > Assets:EU:Bank 400 EUR @2.5 USD ; <==This is 2.5, instead of the > official 2.0 > Assets:US:Bank -1000 USD > > ; Now you have 1400 EUR in your balance sheet report without you having > had any income or expenses. > ; Will you have do explain this somehow? > > > -- 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/2b58d680-9383-4f77-bcb6-c2f79fb7efecn%40googlegroups.com.
