Multicurrency accounting

[Constantine Linnick]

This is copy of reddit post. Wiki example does not work for me or it's wrong

Let we have following transaction:

Income 100 EUR @ 1.0

Sell 50 EUR @ 1.1

Income 100 EUR @ 1.2

Sell 100 EUR @ 1.3

Now @ 1.4

If calculate everything in USD I expect to have balance

Assets.Cash 50 * 1.4 + 50 * 1.1 + 100 * 1.3 = 255 USD

Income 100 * 1 + 100 * 1.2 = 220 USD

Equity.Realized 50 * (1.1 - 1.0) + 50 * (1.3 - 1.0) + 50 * (1.3 - 1.2) = 25 USD

Equity.Unrealized 50 * (1.4 - 1.2) = 10 USD

I tried trading account according to wiki and results are unadequate

P 2022-01-01 EUR 1.0 USD

2022-01-01 Salary

Assets:Bank 100.00 EUR

Income:Salary

P 2022-01-02 EUR 1.1 USD

2022-01-02 Transaction 1

Assets:Bank -50.00 EUR

Equity:Trading:USD 50.00 EUR

Equity:Trading:EUR -55.00 USD

Assets:Bank 55.00 USD

P 2022-01-03 EUR 1.2 USD

2022-01-03 Salary

Assets:Bank 100.00 EUR

Income:Salary

P 2022-01-04 EUR 1.3 USD

2022-01-04 Transaction 1

Assets:Bank -100.00 EUR

Equity:Trading:USD 100.00 EUR

Equity:Trading:EUR -130.00 USD

Assets:Bank 130.00 USD

P 2022-01-05 EUR 1.4 USD

Income is not adequate

$ ledger bal -f trade.txt -X USD

255.00 USD Assets:Bank

25.00 USD Equity:Trading

-185.00 USD EUR

210.00 USD USD

-280.00 USD Income:Salary

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

0

If I put FIFO logic manually

P 2022-01-01 EUR 1.0 USD

2022-01-01 Salary

Assets:Bank 100.00 EUR @ 1.0 USD

Income:Salary

P 2022-01-02 EUR 1.1 USD

2022-01-02 Transaction 1

Assets:Bank -50.00 EUR {1.0 USD} @ 1.1 USD

Assets:Bank 55.00 USD

Equity:Realized Gains -5.00 USD

P 2022-01-03 EUR 1.2 USD

2022-01-03 Salary

Assets:Bank 100.00 EUR @ 1.2 USD

Income:Salary

P 2022-01-04 EUR 1.3 USD

2022-01-04 Transaction 1

Assets:Bank -50.00 EUR {1.0 USD} @ 1.3 USD

Assets:Bank -50.00 EUR {1.2 USD} @ 1.3 USD

Assets:Bank 130.00 USD

Equity:Realized Gains -20.00 USD

P 2022-01-05 EUR 1.4 USD

balance is correct

$ ledger bal -f trade2.txt -X USD

255.00 USD Assets:Bank

-25.00 USD Equity:Realized Gains

-220.00 USD Income:Salary

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

10.00 USD

But I have to manually keep track of every income transaction.

Quiestion: is there a better way to do it or I miss something?

[the.so...@gmail.com]

Hi,

I'm guessing the wiki page you're referring to is:

https://github.com/ledger/ledger/wiki/Multiple-currencies-with-currency-trading-accounts

The trading accounts method is not incorrect: it simply doesn't match what you expect.  The trading accounts method will always give you a 0 balance, regardless of the currency in which you calculate the balance, which is not the case for postings using @ (which will differ, depending on the currency).  The downside is that in the trading accounts method, you have to note capital gains and losses by hand. It is not auto-calculated.

To handle lots with trading accounts, you'll need to use dated sub-accounts:

cat temp.j

P 2022-01-01 EUR 1.0 USD

2022-01-01 Salary

    Assets:Bank:EUR                         100.00 EUR
    Equity:Trading:EUR-USD:EUR:20220101    -100.00 EUR
    Equity:Trading:EUR-USD:USD:20220101     100.00 USD
    Income:Salary                          -100.00 USD

P 2022-01-02 EUR 1.1 USD

2022-01-02 Bank | Convert 50 EUR to 55 USD
    Assets:Bank:USD                          55.00 USD
    Equity:Trading:EUR-USD:USD:20220101     -50.00 USD  ; balance:  50 USD
    Equity:Trading:EUR-USD:EUR:20220101      50.00 EUR  ; balance: -50 EUR
    Income:Capital:Short-Term                -5.00 USD
    Assets:Bank:EUR                         -50.00 EUR

P 2022-01-03 EUR 1.2 USD

2022-01-03 Salary

    Assets:Bank:EUR                         100.00 EUR
    Equity:Trading:EUR-USD:EUR:20220103    -100.00 EUR  ; balance: -100 EUR
    Equity:Trading:EUR-USD:USD:20220103     120.00 USD  ; balance:  100 USD
    Income:Salary                          -120.00 USD

P 2022-01-04 EUR 1.3 USD

2022-01-04 Bank | Convert 100  EUR to 130 USD
    Assets:Bank:USD                         130.00 USD
    Equity:Trading:EUR-USD:USD:20220101     -50.00 USD  ; balance:   0 USD
    Equity:Trading:EUR-USD:USD:20220103     -60.00 USD  ; balance:  60 USD
    Equity:Trading:EUR-USD:EUR:20220101      50.00 EUR  ; balance:   0 EUR
    Equity:Trading:EUR-USD:EUR:20220103      50.00 EUR  ; balance: -50 EUR
    Income:Capital:Short-Term               -20.00 USD
    Assets:Bank:EUR                        -100.00 EUR

P 2022-01-05 EUR 1.4 USD

with that you get

ledger -f temp.j bal -X USD
          255.00 USD  Assets:Bank
           70.00 USD    EUR
          185.00 USD    USD
          -10.00 USD  Equity:Trading:EUR-USD
          -70.00 USD    EUR:20220103
           60.00 USD    USD:20220103
         -245.00 USD  Income
          -25.00 USD    Capital:Short-Term
         -220.00 USD    Salary
--------------------
                   0

So, 

Cash = 255.00 USD (balance of Assets:Bank)

Income:Salary = 220.00 USD (balance of Income:Salary)

Realized Gains = 25.00 USD (balance of Income:Capital:Short-Term)

Unrealized Gains = 10.00 USD (balance of Equity:Trading:EUR-USD)

I hope this helps.

Regards,

Pranesh

[the.so...@gmail.com]

There's one small mistake in the comments in the example journal I provided:

    Equity:Trading:EUR-USD:USD:20220103     120.00 USD  ; balance:  100 USD

ought to be

    Equity:Trading:EUR-USD:USD:20220103     120.00 USD  ; balance:  120 USD