currency exchange and balance

[Anton Vodonosov]

Hi. I have a problem which I isolated into a small test case.

The journal below deals with two currencies, USD and BYR.

P 2012/08/10 01:18:00 $ BYR 10.00

2012/08/01 * Opening Balance

    Assets:Wallet             BYR 1200

    Equity:Opening Balances

2012/09/01

    Assets:Wallet              $50 @ BYR 11

    Assets:Wallet

2012/10/01

    Assets:Wallet              $50 @ BYR 12

    Assets:Wallet                          

                          

Now if I run "ledger -f journal.dat -X $ balance" it prints:

                $104  Assets:Wallet

               $-100  Equity:Opening Balances

--------------------

                  $4

As you see, there is a disbalance of $4. How to deal with that?

Ledger manual at http://www.ledger-cli.org/3.0/doc/ledger3.html#Fixing-Lot-Prices

says that Ledger can auto-generate postings to Equity.CapitalLosses.

It would be nice, how to achieve this?

I do not want the price for the USD bought to be "fixed", because the exchange

rate is changed every day, and I would like to see reports according to the current prices.

If I understand correctly, "fixed" price will prevent that.

[Max Erickson]

The $4 is the 50 BYR left in the account, at the last seen exchange rate of 12.


Max

[Anton Vodonosov]

Max, thanks for the reply. I understan how it works.

The problem is that it doesn't balance when I convert commodities to USD.

If I don't convert commodities, it doesn't balance too:

                $100

              BYR 50  Assets:Wallet

           BYR -1200  Equity:Opening Balances

--------------------

                $100

           BYR -1150

So, once I have a currency exchange in my journal,

it doesn't balance, thus loosing the main utility of double-enty accounting.

My question: is it possible to get a balance report when converting all commodities

to one currency, with automatically calculated capital loses, so that total balance is 0?

Best regards,

- Anton 

[Anton Vodonosov]

Let me show what balance I would like to get:

                $104.17  Assets:Wallet

                 $15.83  Equity:Capital Losses

               $-120.00  Equity:Opening Balances

-----------------------

                  $0.00

The algorithm to get such balance.

As we are converting everythign to $, $ values are left as is

and special care is only applied to BYR values.

1. At the initial date calculate $ cost of BYR values according to the exchange rate at the initial date.

2. Every time a transaction changes BYR account, first revaluate BYR value according to the excange rate

    at this date. The diffenrece between previous $ cost of the BYR value and its new $ cost

    is balanced with Equity:Capital Losses account. This rule applies to all BYR tranactions:

    be it currency exchange or spendings.

3. At the end of the period revaluate the BYR values according to the exchange rate at this time.

    Balance the difference with Equity:Capital Losses.

This approach is an official guideline for accountin in my country, when company has accounts in foreign currnicies.

And it works, I really lost these $15.83, because initially I was really worth of $120 and now only of $104.17.

Here is my example journal commented accourding to this algorithm:

P 2012/08/10 01:18:00 $ BYR 10.00

2012/08/01 * Opening Balance

    Assets:Wallet             BYR 1200 ; $ 120 accoring to the exchange rate at this date

    Equity:Opening Balances

2012/09/01

    ;; Here we are going to touch BYR value. First revaluate it by the current exchange rate of 11:

    ;; 1200/11 = 109.09.

    ;; The diff with the previous value (109.09 - 120 = -10.91) must be balanced

    ;; with Capital Losses account by a fake posting:

    ;;

    ;; Equity:Capital Losses    $10.91

    ;;    

    Assets:Wallet              $50 @ BYR 11

    Assets:Wallet

    ;;

    ;; Hint: BYR remaining value now is 650. 650/11 = $59.09 

2012/10/01

    ;; Again, going to touch BYR. Revaluate it first by the current exchagne rate:

    ;; 650/12 = $54.17. The diff with previous value is $59.09 - $54.17 = $4.92.

    ;; Fake posting:

    ;; Equity:Capital Losses    $4.92

    ;;    

    Assets:Wallet              $50 @ BYR 12

    Assets:Wallet                          

    ;;

    ;; Hint: BYR remaining value now is 50. 50/12 = $4.17

The balance repeated:

==========================================================================

                $104.17  Assets:Wallet

                 $15.83  Equity:Capital Losses

               $-120.00  Equity:Opening Balances

-----------------------

                  $0.00

Is it possible to have such a report from ledger?

Best regards,

- Anton

[Max Erickson]

If you specify an exchange rate for the initial entry, Ledger will at least keep track of the change in value (so something like BYR 1200 @ $0.10). Then a register report will have entries for your adjustments.

I don't no if there is a way to have the adjustments associated with an account.

[Anton Vodonosov]

On Tuesday, February 12, 2013 10:05:44 PM UTC+3, Max Erickson wrote:

If you specify an exchange rate for the initial entry, Ledger will at least keep track of the change in value (so something like BYR 1200 @ $0.10). Then a register report will have entries for your adjustments.

I don't no if there is a way to have the adjustments associated with an account.

Do you mean I can get balance shomehow after generating new journal with registry report?