It's been rumoured that Graham Leggett said:
>
> [EMAIL PROTECTED] wrote:
>
> > R/3 handles this by having two values on each transaction line item,
> > one for the local currency, and one for the company currency.
That's what gnucash does.
> How are the shares currently handled?
Each line item has a 'price' and an 'num-shares'. For ordinary banking,
price is always 1.00.
> In theory all accounts should be handled like stock accounts, where
> "items" in the destination account are "bought", rather than money
> transferred from account A to account B.
right. that's how gnucash does it (under the covers; you aren't always
aware of this in the gui).
> As to the actual balancing of the accounts, if you buy some shares, and
> the price goes up, how is that handled?
The number of shares stays constant.
> Suddenly there is "more" money
> in the share account than what you originally deposited,
Right. the balance as of date mm/dd/yy is always the total number of shares
on mm/dd/yy times the last price before mm/dd/yy.
> as a result
> the books won't balance?
They always balance, but you have to understand there are several balances
-- the number of shares, which is const,
-- the value, which changes over time.
-- the profit/loss, which is current value minus amount originally invested
This is enforced through the following eqn:
0.0 == value (in currency C) withdrawn from acct A (at time T)
+ value (in currency C) deposited in acct B (at the exact same time T).
where value is either one of of the following two:
value == price (per item, in currency C) times number of items.
or
value == number of units of curency C.
Confusing? Well, in many cases, 'item' is a share of stock, and 'C' is 'dollars'
But for people dealing with multiple currencies, 'item' might be that other currency,
and the 'price' is just the exchange rate.
(Item could also be 'car' if you are a car dealer ... 'mp3' if you sell mp3's :-)
etc.)
-------------------------
It all works (or sould work).
The only gotcha is that the gui for currency trading is somewhat confusing
in how it works, and should be somehow simplified.
--linas
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