Thank you for posting this. Your second example explains weirdness that I was seeing but couldn't comprehend.
So to put it succinctly, ledger balances as long as the rounded amounts balance. Perhaps I don't understand all of the nuances, but I have to say that I don't like that. If a transaction is off by a fraction of a cent, then that *does not balance* for me! I am in the same boat as you where my bank reports one thing, but is actually stealing fractions of currency. I haven't decided whether or not having an elided expense account or simply reporting the exchange rate that was actually used is better. One of the things that makes me think an elided expense account is better is that the price history seems to be dependent upon transaction order. I am currently storing the price db in a separate file, so I'm never sure whether ledger will use the price that something traded at, or the price I put in the price db. For various reasons, it is important to me that it is the latter. Anyway add me as a vote for balancing at full precision. I only want rounding to occur in reporting. On 6 October 2014 21:31, Nathan Grigg <[email protected]> wrote: > Sorry to bring up an old topic. I followed this with some interest back > when we discussed it, but my own thoughts hadn’t yet crystalized, so I was > silent. Now I have thoughts to share. > > Martin Blais: > > I think the question should be phrased in terms of what precision you want > to represent numbers _internally_. Isn't a worthy goal to attempt to > replicate the same precision as the real-world accounts they represent? > > > I agree. To me, display precision is much less important than the internal > representation. > > Martin again: > > Rounding should occur at the point of calculating the "balance amount", > that is, the amount that is used to balance against the rest of the > postings of the transaction. > > > I agree again, but disagree with how this is implemented in both ledger > and beancount (I am not familiar with hledger). In particular, I think that > the only way to avoid strange situations is for every transaction to > balance exactly, as in A+B=0 to the full precision of the internal > representation. > > Let’s ignore the concept of elided values and start by thinking only about > the whether a transaction balances. > > There are two cases. > > *Case 1: Single currency. Postings should balance exactly.* > > 2014-01-01 * transfer > Assets:Bank1 $1.00 > Assets:Bank2 $-1.001 > > It seems pretty obvious that this should trigger an error. Ledger gets > this right because it requires all transactions to balance to the maximum > precision specified in the document (not quite, we’ll get to this later). > Beancount, with its fixed tolerance, lets this through (Even $-1.01 would > pass). Even if the tolerance is exposed as an option, you give the user the > opportunity to screw things up. > > *Case 2: Multiple currencies.* > > 2014-01-01 * buy AAA > Assets:Investments 2 AAA @ 10.1234 EUR > Assets:Bank -20.25 EUR > > The 2 AAA and the -20.25 EUR are actual amounts. The quoted rate may have > been 10.1234, but the truth is, you bought at 10.125 EUR (sucker!) > > Note that this need to adjust price due to rounding does not arise solely > from overprecise pricing, but also when you purchase fractional shares. > > 2014-01-01 * buy VPMCX > Assets:Investments 9.66 VPMCX @ 103.52 USD > Assets:Bank 1000.00 USD > > Again, the $1000 and the 9.66 shares are exact quantities. They do not > represent something that has been rounded. You do not have an extra, > invisible 0.0032 USD lying around. It is the $103.52 that is wrong. > > So one solution is to simply record the share price you paid instead of > the share price you were quoted. This is the same as Martin Machlmayr’s > suggestion to use ‘@@' instead of ‘@'. But as Martin also pointed out, > there is value in using ‘@‘, namely, your cost basis can match the bank’s > report, the pricedb gets an accurate market price, and you get an extra > check that you haven’t mistyped a number. > > A different solution is for the program to replace the cost basis that you > specify with the true cost, as long as it is close enough. But this doesn’t > solve the problem that you might want to attach the bank-reported cost to > the posting, or see it in reports. > > One final solution, and what I have settled on for now, is a rounding > account. I insert one manually (with elided amount), but the program could > easily do this for you. It sweeps away whatever is left over, and has > accumulated 0.12 USD (in expenses) for me so far this year. The alternative > is that my double-entry accounting ledger is out of balance by 12 cents per > year. (Maybe not a big deal, but it bugs me.) > > The point is, no matter how you decide to round the amounts, you have to > account for the rounding in some way or accept the fact that your system is > out of balance. > > Note that either of these automated solutions could probably be > implemented using beancount plugins. > > *Weird things happening* > > If you don’t require each transaction to balance, you easily drift away > from overall balance. In Ledger: > > D 1.00 USD > 2014-01-01 Test > assets 1 CAD @ 1.005 USD > liabilities > 2014-01-02 Test > assets 1 CAD @ 1.005 USD > liabilities > > % ledger bal liabilities > 2014-01-01 Test liabilities -1.00 USD > -1.00 USD > 2014-01-02 Test liabilities -1.00 USD > -2.01 USD > > Here is another: > 2014-01-01 Test > assets 1 CAD @ 1.005 USD > liabilities -1.00 USD > 2014-01-02 Test > assets 1 CAD @ 1.005 USD > liabilities -1.00 USD > 2014-01-03 Test > assets 1 CAD @ 1.005 USD > liabilities -1.005 USD > > % ledger bal -B > 3.015 USD assets > -3.005 USD liabilities > -------------------- > 0.010 USD > > This second example is curious because if you put the third transaction at > the beginning, the other two now fail to balance, because the precision > becomes 3 decimal points before they are read, whereas before the precision > switched from 2 to 3 partway through. > > *Eliding postings* > > Once you have what it means to balance figured out, it is easy to complete > a transaction with an elided posting. Simply choose the value that > minimizes the error. (And then either roll the error into an adjusted price > or add a rounding transaction.) Obviously, to do this, you would need rules > about precision, per currency and possibly per account. If you really want > to, you can have custom rounding rules. > > In my experience, though, you will often still get the number wrong, > because at the end of the day, the bank will do what it does for its own > reasons. (In my 401k, for example, I contribute a fixed $X to buy Y > fractional shares at price Z, but X - Y*Z has been as big as 2.5 cents > because strictly speaking the bank is setting Y = round(X/Z, 3), even > though I would never think of it that way, or record it that way in my > ledger.) > > Nathan > > -- > > --- > You received this message because you are subscribed to the Google Groups > "Ledger" group. > To unsubscribe from this group and stop receiving emails from it, send an > email to [email protected]. > For more options, visit https://groups.google.com/d/optout. > -- --- You received this message because you are subscribed to the Google Groups "Ledger" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. For more options, visit https://groups.google.com/d/optout.
