On Jul 30, 2010, at 5:07 AM, Roel Vanhout wrote:
> So this is only for currency fluctuations? Because the 20$ movie
> example made it seem like it was about accounting for time value
> fluctuations.
>
> Still, in a 'traditional' accounting system you'd convert the amount
> to your 'native' currency, using the fixed exchange rate, at the time
> you book the transaction. This would also give you an entry in which
> to incorporate conversion costs. I'm not sure what extra you'd get
> from keeping the original entry and tagging it later to mean final.
Let's give a quick example that is the actual reason for this idea:
2009-04-17 * Got KRW from the ATM
Assets:Cash 170000 KRW
Assets:Current -102.71 EUR
2009-04-18 * Business dinner
Expenses:Dining 165000 KRW
Assets:Cash
So, here we exchange some EUR for KRW on 4/17. Today, if I valuate these
KRW, the value should in terms of today's price for EUR.
But in the second transaction, I've spent some of those KRW. If today I
ask for a reporting of expenses in terms of EUR, I should use the price
of KRW from 4/18, not today.
This makes the second transaction "final", but the first one not.
John
