On Sat, 2007-12-01 at 10:53 -0500, Sean C. McCord wrote: > On Fri, Nov 30, 2007 at 08:24:36PM -0800, Chris Travers wrote: > > Hi Bob; > > > > On Nov 30, 2007 7:39 PM, Bob Gustafson <[EMAIL PROTECTED]> wrote: > > > > > This example is prompted by the need to: > > > > > > 1) Handle accounting in one currency (EUR), pay bills, receive rent, > > > etc. > > > 2) Make investments from one currency (USD) to the other (EUR) > > > 3) Pay taxes on profits (if any) in USD. > > > > > > The Chicken Farm example shows two methods of getting the necessary view > > > for paying taxes (item 3 above). > > > > > > I think you detail the problem quite will. Here is a far simpler (and more > > common) example. > > > > A Canadian user of LedgerSMB opens a USD account and deposits $1000 CAD into > > the account. Once the exchange rate and fees are taken out, one cannot just > > track the amount in the account in CAD bacause the exchange rate varies > > frequently. Instead the amount has to "float" in USD relative to the CAD > > books. At the same time, the books always have to balance in CAD. > > > > Suppose for argument's sake the CAD to USD rate is 1:1 with no transaction > > fees when the account is opened. The user no longer has $1000 CAD, but now > > has $1000 USD. However, when we want to check the trial balance it will > > show as $1000 CAD. Ok, now suppose that the individual pays me $200 USD for > > services (now having $800 USD in the account). Suppose that the USD is > > still doing badly and that the rate is now 1.03 CAD = 1 USD. Ok, now we > > have to record the transaction correctly so we know how much money is in the > > accont ($800 USD) but we also have to record the transaction so we know how > > much was paid for the expense ($206 CAD). Currently this is done by > > recording the $206 and using a view approach to get it back to $200 (from > > $1000 = $800). I propose that we record authoritatively how much money was > > withdrawn in the source currency as well for auditing purposes. > > > > The major pieces of this puzzle we are lacking are not that major. We need: > > 1) A way of enforcing a master currency on an account. > > 2) Better reporting of things like current balances. > > > > Current balance reporting has a number of other challenges associated which > > I think we need to tackle (especially for the midsize businesses in our > > userbase) but that is another discussion. > > Pardon me if this is what you are suggesting with the "master currency" > concept, but it does not sound like it. > > IANAA: It would seem the simplest concept to declare with the creation > of an account, the currency of that account. Since a bank "account" or > a credit card "account" or whatever external account may exist will be > mapped to a particular (static) currency, your books will not need to > worry about continuous updates and translations. When a report is run, > you should have the option to convert the figures (for display) at the > present conversion rate to a different currency. In this manner, the > conversionis more trivial than the "Cash" or "Accrual" view system, all > accounts would be correct for the currency in which they are stored (at > all times), and reports can be generated (at any time) which would > properly convert between the currencies.
YES, this is it. Use multiplication by conversion rate to get a view 'at that moment' To 'manage' the project, it is not necessary to have a ledger account accurate to the penny (centime, pence, rappen), but a 'view' which shows reality. > > Additionally, if there is a conversion "fee" or "rate margin", these > could be associated to a CoA exchange table, as well. > > Is this what you are suggesting, or if not, what are the pitfalls of > this concept? > ------------------------------------------------------------------------- SF.Net email is sponsored by: The Future of Linux Business White Paper from Novell. From the desktop to the data center, Linux is going mainstream. Let it simplify your IT future. http://altfarm.mediaplex.com/ad/ck/8857-50307-18918-4 _______________________________________________ Ledger-smb-devel mailing list [email protected] https://lists.sourceforge.net/lists/listinfo/ledger-smb-devel
