Eric Hanchrow's currency doc patch.

git-svn-id: svn+ssh://svn.gnucash.org/repo/gnucash/trunk@2587 57a11ea4-9604-0410-9ed3-97b8803252fd
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Dave Peticolas 2000-07-17 00:55:01 +00:00
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"xacc-double.html#IDENTITY">double entry accounting
identity.</a></p>
<h1>
How to set up a foreign-currency account
</h1>
<p>All of the above may sound straightforward, but you may get
stumped when you first try to represent some foreign money. Let's
demonstrate how you'd go about setting up an account to represent,
say, French Francs.</p>
<p>Let's say you have an account that holds cash in US dollars,
and it has $1,000 in it. You want to buy about $100 worth of
Francs, and naturally you'd like to represent those Francs in
their own account. Here's what you need to do:</p>
<ol>
<li>
Create a new account (name it "Francs") of type Cash, with a
currency of FRF (that's the ISO code for French Francs; see <a
href="#ISOCURR">ISO Currency Codes</a>, below).
</li>
<li>
Create <em>another</em> account (name it "Trading"), of type
Currency, with a currency of USD, and a <em>security</em> of
FRF. This account will represent <em>trades</em> between the
two currencies, or to be more precise, purchases of Francs
with dollars.
</li>
<li>
Now open the "Trading" account, and enter a transaction that
transfers from your cash account. Put 555 in the "Bought"
column, and .18 in the Price column. You've now bought 555
Francs for $0.18 apiece.
</li>
<li>
Last step: transfer the $99.90 that is now in your trading
account into the "Francs" account. Note that you could not
have transferred anything directly from cash to Francs (try
it); those two accounts do not have a currency in common.
</li>
</ol>
<p>A few unpleasant things you may have noticed about the above
procedure:</p>
<ul>
<li>
All the numbers you see in the "Balance" column of your main
window are in dollars, even the "Francs" account. This is a
bug. Worse, the "Assets" figure at the bottom is simply
wrong: it should read $1,000, but instead reads $1,455.10,
having apparently added your 555 Francs directly to your 900.1
remaining dollars.
</li>
<li>
It's confusing. This could also be considered a bug.
</li>
</ul>
<p>Notwithstanding the above unpleasantness, this is how you deal
with foreign currencies in GnuCash. The key is that you need a
trading account whose Security field names a different currency
than its Currency field, and your trades must go "through" this
trading account.</p>
<h1>ISO Currency Codes</h1>
<a name="ISOCURR"></a>