On Fri, Jul 30, 2010 at 11:25 AM, John Wiegley <[email protected]> wrote:
> 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.
But then we come back to the line in your first mail, "Reflecting on
this, it seems that Income/Expenses are by nature final categories,
while Assets/Liabilities are open." Which is deeply embedded in the
whole double bookkeeping system already, and also how ledger work
already. You can track assets and liabilities in various currencies
(or commodities) and convert to one final valuation at reporting time,
while income and expenses are valuated at the time they are incurred
('fixed').
I've (briefly) looked for transactions where assets would be 'fixed'
or income would not be, but I can only come up with contrived examples
like future incoming cash flows for which the price is fixed through
an option. But again that's finance not accounting.
cheers,
roel
