ISTR such a discussion as well; I also believe someone explained to me then why these reports are using the PriceDB at all. Now, I can’t recall what the explanation was, and I *still* don’t see why the Price DB is accessed to create a report for transactions in which the price has been already set.
David > On Mar 28, 2019, at 1:35 PM, Adrien Monteleone > <[email protected]> wrote: > > James, > > If I’m not mistaken, I recall a discussion in the last 6 months or so that > average/weighted is ‘broken’. That it reports the correct figures may be a > transient phenomenon as you fear. (I’ll admit, I don’t have the thread handy > and it could be that ’Nearest in time’ is the one that is broken - it might > be on the devel list, so look there if you don’t find it in the user > archives.) > > ’Nearest in time’ should be the source you want because the report will look > for the exchange rate closest to the date of the actual transaction it is > including in the calculations. Since you have actual transactions using a > particular exchange rate, it should pull those figures exactly. > > That should be the default. (It is for me and I can’t seem to find a > preference setting for it, short of saving a report configuration.) > > ‘Most Recent’ is definitely not what you want and would use the most current > exchange rate. (perhaps useful for a Balance Sheet, not so much for a P&L) > > I personally haven’t seen any issues with ’Nearest in time’. > > Regards, > Adrien > >> On Mar 26, 2019, at 11:36 AM, James Walker <[email protected]> wrote: >> >> Hello fellow GnuCash users, >> >> Per the subject, I'm somewhat confused by the impact of the report "Price >> Source" when recording Bills received in a foreign currency. >> >> I'm using GnuCash for a UK business (all accounts in GBP) for very simple >> affairs. >> >> I use the services of a US business which invoices everything in USD. >> >> To account for this GnuCash, I've done the following: >> >> >> * Enabled Trading Accounts >> * Created an A/Payable account in USD ("Liabilities:Current >> Liabilities:Trade Creditors USD") >> * Created a USD expenses account for the company ("Expenses:US Company >> USD") >> * Created a Vendor for the company and set its payment currency to USD >> >> When I receive an invoice from the company, I do the following: >> >> >> * Create a Bill for the invoice, with the USD amount shown on the invoice, >> for the Vendor >> * Post the Bill to the Trade Creditors USD (Liability) / US Company USD >> (Expense) accounts >> >> When I pay the invoice, I do the following: >> >> >> * Credit Bank (GBP) and debit Trade Creditors USD (USD) >> * GnuCash prompts for the exchange rate; I input the GBP amount which was >> taken from the bank account for the payment >> >> An example of three invoices received: >> >> >> 1. Invoice 1: $14.40 >> 2. Invoice 2: $14.40 >> 3. Invoice 3: $14.40 >> >> * Balance of US Company USD (Expense): $43.20 >> >> When credited from Bank (GBP), the amounts respectively are: >> >> >> 1. £10.60 >> 2. £10.87 >> 3. £11.02 >> >> * Total expenses paid from bank in GBP: £32.49 - this is the figure I >> expect to see on the P&L >> >> These figures match up with what is shown in the trading accounts: GBP >> £32.49, USD -$43.20. >> >> Generating P&L >> >> When I now go and generate a report (e.g. Profit & Loss), the default >> options seem to be showing the expenses at the most recent exchange rate. >> >> I see expenditure of e.g. £32.61, with a £0.12 currency trade. This means >> the P&L is wrong and the balance sheet won't balance, because the >> expenditure from Bank was actually only £32.49. >> >> It seems the multi-currency features in GnuCash are geared towards actual >> currency trading/asset tracking etc., not my simple "I've got a USD invoice" >> scenario. >> >> To me, the £32.61 figure seems blatantly incorrect; I haven't spent that >> much money. My understanding is the P&L needs to show £32.49, which is how >> much was actually taken from the Bank and debited to "Trading:Currency:GBP" >> from "Trading:Currency:USD". >> >> It seems GnuCash is forcing automatic currency conversions onto me when I >> don't need them, and breaking things in the process, but my understanding >> may be wrong, which is why I'm asking this. >> >> By changing "Price Source" in the report options to either "Average Cost" or >> "Weighted Average," I can get the P&L to show £32.49 as expected. >> >> However, I don't understand why this works, or what these two price sources >> are actually calculating. I've read the documentation and don't fully >> understand the language so could really benefit from some clarification. >> >> Although it is currently working, I need to understand why it is working and >> whether it will continue working, in order to have peace-of-mind that the >> P&L will continue to show the expected figure when using these options in >> the future, after adding further transactions. >> >> The documentation says this of "Average Cost": >> >> The amount-weighted net average of all splits exchanging the >> commodity for another regardless of account. Gain/loss splits are included >> in the calculation. >> >> While this does produce the value I expect to see on the report (in my >> trivial experiments), I'm concerned about the "average" labelling as I don't >> understand what is actually being averaged or how it's ending up producing >> the correct value, when the defaults don't. The same is true of "Weighted >> Average" - again, it gives me the figure I want to see, but I don't know >> why. What is it averaging? What is it weighting with respect to what? How >> will the output of these two options differ, if at all, as I add more >> transactions in this manner? >> >> My questions >> >> >> 1. Please provide a simple explanation of the "Average Cost" / "Weighted >> Average" price sources. Which is most appropriate for my scenario? Why do >> they give me the correct value, and will they continue to do so down the >> line? Is there a risk future transactions will throw off the "average" and >> create an incorrect P&L in the future, which I won't necessarily immediately >> spot? >> 2. Is there anything wrong with my process here? >> >> The confusing thing for me is that everything is displayed as expected with >> the figures in the chart of accounts, but I'm getting thrown by the default >> report options and the labelling of the price sources. I believe this is >> just GnuCash's default multi-currency/trading handling conflicting with my >> requirements but need to make sure. >> >> I just want to confirm if it is safe for me to record USD bills in this >> manner when my books are in GBP, and then how I should go about generating a >> P&L which shows the total expenses in GBP as actually paid out of the bank. >> >> Kind regards, >> James Walker > > _______________________________________________ > gnucash-user mailing list > [email protected] > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. 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