Chart of Accounts standards and consistency

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POliveira

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Dec 11, 2021, 3:50:24 AM12/11/21
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Dear all,

I wanted to know your opinion regarding how to emulate multi-currency or multi-commodity accounts.
I understand this is ultimately subjective, but I hope someone can provide me some guidance.

Case #1

I have multiple bank accounts with my Bank, denominated in different currencies. Each account has a distinct account number and I receive an individual account statement for each one of them.

Question: Should I (option 1) create/use a separate account in ledger (Assets:My Bank:EUR and Assets:My Bank:USD) OR should I (option 2) have only one account (Assets:By Bank) which then has holdings in both currencies?

I am currently using option 1.

Case #2

I have an online wallet (imagine something like Paypal, Skrill, or Revolut) where I hold multiple currencies and I can do instant currency exchanges. For this type of services, I do not receive any statement, although I could download one on-demand. Depending on the specific service, I may or may not be able to download individual statements for each currency.

Question is the same as in Case #1. However, in this case I am using option 2.

Case #3

I have an online brokerage account which I use to buy commodities (let's say, corporate stocks). In this platform, I will have a portfolio of multiple stocks AND I may have a balance of multiple currencies as well.

Question is the same again. In this case I am using option 2 too.

So, at the end of the day, I would like to know how do you decide whether to use multiple single-currency/commodity accounts or a single multi-currency/commodity account?

Also, what do you find to be the advantages and disadvantages of each approach.

Many thanks, POliveira

POliveira

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Dec 12, 2021, 12:05:16 AM12/12/21
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In addition, there is a 4th Case I forgot to mention, which is cash holdings.
Do you recommend having a single account Assets:Cash with multiple currencies in it or instead separate accounts as in Assets:Cash:EUR , Assets:Cash:USD etc.? And why?

Martin Michlmayr

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Dec 12, 2021, 1:02:19 AM12/12/21
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* POliveira <polive...@gmail.com> [2021-12-11 21:05]:
> In addition, there is a 4th Case I forgot to mention, which is cash
> holdings.
> Do you recommend having a single account Assets:Cash with multiple
> currencies in it or instead separate accounts as in Assets:Cash:EUR ,
> Assets:Cash:USD etc.? And why?

Personally, I have a single Assets:Cash account. I prefer a simple
account structure.

If I want to limit my queries to one currency, I can always do:
ledger reg ets:cas -l "commodity == 'PHP'"

Having said that, I can see two arguments for using Assets:Cash:CURRENCY

* `reg cash:php` is easier than `reg ets:cas -l "commodity == 'PHP'"`
* Balance assertions might be easier if there's only one commodity in the account (?)

--
Martin Michlmayr
https://www.cyrius.com/

the.so...@gmail.com

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Dec 12, 2021, 3:10:46 PM12/12/21
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For all "Assets" and "Equity" sub-accounts, I enforce a single-commodity only structure. While I haven't consciously enforced this in "Liabilities" and "Income" sub-accounts, they've ended up as single-commodity-only in practice.  However, with "Expenses", I end up having multiple commodities in a single sub-account.

The main considerations for me are:
1. It is a bit easier to type queries, as I don't have to use the syntax for currencies.
2. There is no penalty for sub-accounts: the depth of the accounts can be limited using `--depth`.
3. Reports look neater, in my opinion, with single-commodity sub-accounts.

I guess the one quasi-exception / breaking of a rule is that while I keep USD in Assets:Cash:USD, and GBP in Assets:Cash:GBP, I keep ₹ in Assets:Cash rather than Assets:Cash:INR, since that is my base currency, and the :INR seems redundant even though this choice is an affront to consistency.


psionl0

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Dec 12, 2021, 9:38:43 PM12/12/21
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My preference is that transactions in a particular ledger account should be exactly the same as those in the corresponding bank statement. So if your bank gives you a different statement for each individual currency then you should have different ledger accounts for each statement/currency.

When it comes time to reconcile your transactions, you will be glad you structured your accounts this way.

psionl0

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Dec 12, 2021, 9:49:43 PM12/12/21
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Since cash holdings don't have bank statements associated with them, it is acceptable  to use a single Assets:Cash account with multiple currencies. Your balance report will show how much of each currency is held in the cash account.

On Sunday, December 12, 2021 at 1:05:16 PM UTC+8 POliveira wrote:

Paulo Oliveira

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Dec 13, 2021, 1:54:06 AM12/13/21
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Indeed I follow more or less psionl0's suggested approach.
The only situation I am unsure to deal with then is when I have some sort of online wallet where I can hold multiple currencies and/or commodities. Imagine like a brokerage platform where I can hold both currencies and stocks. How would you do in that case?

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