[GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

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[GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Chary Chary
Hello everybody,

I just started learning gnucash with the goal to depart from my from my
Excel-based bookkeeping system with pivot tables, so forgive me if I ask
stupid question. i think I read pretty much all of the help file, but still
didn't understand whether the following is possible:

I am just wondering  whether there is a cashflow-like report which shows
also realized and unrealized gains for certain period

What exactly I mean by this:

Say at the beginning of the year I have produced a Balance Sheet report.
This report shows how much assets I have, which liabilities and delta
between them. Suppose at begging of the year I had checking accounts in USD
and Euro and some stock.
Throughout the year I was getting salary, paying expenses, at the same time
exchange rate was changing, stock price was changing etc. My be I sold some
stock, moved money between USD and Euro accounts

Now at the end of the year I have produced a new balance sheet.

So, I want to be able to explain a delta between a balance sheet at the
beginning of the ear and at the end.

E.g.:

I got so much salary
I paid so much costs

But also:
Lost so much due to exchange rate change
Gained to much due to stock price increase etc.

So, effectively I need to be able to drill down in the delta in Balance
Sheet report

Regards.
Chary
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Stephen M. Butler
You are describing an "Income Statement" aka "Profit/Loss Statement". 
This is available from the reports menu.

On 2/24/19 4:02 PM, Chary Chary wrote:

> Hello everybody,
>
> I just started learning gnucash with the goal to depart from my from my
> Excel-based bookkeeping system with pivot tables, so forgive me if I ask
> stupid question. i think I read pretty much all of the help file, but still
> didn't understand whether the following is possible:
>
> I am just wondering  whether there is a cashflow-like report which shows
> also realized and unrealized gains for certain period
>
> What exactly I mean by this:
>
> Say at the beginning of the year I have produced a Balance Sheet report.
> This report shows how much assets I have, which liabilities and delta
> between them. Suppose at begging of the year I had checking accounts in USD
> and Euro and some stock.
> Throughout the year I was getting salary, paying expenses, at the same time
> exchange rate was changing, stock price was changing etc. My be I sold some
> stock, moved money between USD and Euro accounts
>
> Now at the end of the year I have produced a new balance sheet.
>
> So, I want to be able to explain a delta between a balance sheet at the
> beginning of the ear and at the end.
>
> E.g.:
>
> I got so much salary
> I paid so much costs
>
> But also:
> Lost so much due to exchange rate change
> Gained to much due to stock price increase etc.
>
> So, effectively I need to be able to drill down in the delta in Balance
> Sheet report
>
> Regards.
> Chary
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>

--
Stephen M Butler, PMP, PSM
[hidden email]
[hidden email]
253-350-0166
-------------------------------------------
GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8

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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

David Carlson-4
Welcome to the GnuCash user community!

A caveat:  GnuCash reports sometimes give erroneous values when there is
more than one currency in the book  and when there are securities included
in the assets.  There is no simple way to say certain settings will give
accurate results for all cases.  However, seasoned users have found
settings that work for their particular circumstances.  To make matters
more interesting, Release 3.4, the current release, differs from older
releases  as some, but not all of the issues have been addressed.

Other users here can help with specific issues when you get to them.  One
of the gray areas that you hint that you will face is unrealized gains.
You will need to customize your reports somewhat to use 'Nearest in Time"
valuations and to verify that you have values in your price database for
the dates used in your reports.

Good Luck.

David Carlson

On Sun, Feb 24, 2019 at 6:42 PM Stephen M. Butler <[hidden email]> wrote:

> You are describing an "Income Statement" aka "Profit/Loss Statement".
> This is available from the reports menu.
>
> On 2/24/19 4:02 PM, Chary Chary wrote:
> > Hello everybody,
> >
> > I just started learning gnucash with the goal to depart from my from my
> > Excel-based bookkeeping system with pivot tables, so forgive me if I ask
> > stupid question. i think I read pretty much all of the help file, but
> still
> > didn't understand whether the following is possible:
> >
> > I am just wondering  whether there is a cashflow-like report which shows
> > also realized and unrealized gains for certain period
> >
> > What exactly I mean by this:
> >
> > Say at the beginning of the year I have produced a Balance Sheet report.
> > This report shows how much assets I have, which liabilities and delta
> > between them. Suppose at begging of the year I had checking accounts in
> USD
> > and Euro and some stock.
> > Throughout the year I was getting salary, paying expenses, at the same
> time
> > exchange rate was changing, stock price was changing etc. My be I sold
> some
> > stock, moved money between USD and Euro accounts
> >
> > Now at the end of the year I have produced a new balance sheet.
> >
> > So, I want to be able to explain a delta between a balance sheet at the
> > beginning of the ear and at the end.
> >
> > E.g.:
> >
> > I got so much salary
> > I paid so much costs
> >
> > But also:
> > Lost so much due to exchange rate change
> > Gained to much due to stock price increase etc.
> >
> > So, effectively I need to be able to drill down in the delta in Balance
> > Sheet report
> >
> > Regards.
> > Chary
> > _______________________________________________
> > gnucash-user mailing list
> > [hidden email]
> > To update your subscription preferences or to unsubscribe:
> > https://lists.gnucash.org/mailman/listinfo/gnucash-user
> > If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> > -----
> > Please remember to CC this list on all your replies.
> > You can do this by using Reply-To-List or Reply-All.
> >
>
> --
> Stephen M Butler, PMP, PSM
> [hidden email]
> [hidden email]
> 253-350-0166
> -------------------------------------------
> GnuPG Fingerprint:  8A25 9726 D439 758D D846 E5D4 282A 5477 0385 81D8
>
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>


--
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Mike or Penny Novack-4
In reply to this post by Chary Chary
On 2/24/2019 7:02 PM, Chary Chary wrote:

> Hello everybody,
>
> I just started learning gnucash with the goal to depart from my from my
> Excel-based bookkeeping system with pivot tables, so forgive me if I ask
> stupid question. i think I read pretty much all of the help file, but still
> didn't understand whether the following is possible:
>
> I am just wondering  whether there is a cashflow-like report which shows
> also realized and unrealized gains for certain period
>
> ........
> Now at the end of the year I have produced a new balance sheet.
>
> So, I want to be able to explain a delta between a balance sheet at the
> beginning of the ear and at the end.
  Have you run the Income Statement report for the corresponding
interval? (start date day after previous Balance Sheet; end date the
date of the current Balance Sheet.

Does that not show what you want?

Michael D Novack

PS --- a Cash Flow report is something very different. For example, an
unrealized gain would NOT show on it. People may have to run both the
Income Statement and Balance Sheet ( the FIRST time also Balance Sheet
at start, after that you will have the "previous" from last time. But
you can sort of be doing very well in those terms but still run out of
CASH. It's the Cash Flow report that deals with that. By the same token,
you could be doing OK in terms of cash flow (temporarily) but heading
for a crash (building up debt, for example).
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Christian Kluge
In reply to this post by Chary Chary
Hello,

Am 25.02.2019 um 01:02 schrieb Chary Chary:

> Say at the beginning of the year I have produced a Balance Sheet report.
> This report shows how much assets I have, which liabilities and delta
> between them. Suppose at begging of the year I had checking accounts in USD
> and Euro and some stock.
> Throughout the year I was getting salary, paying expenses, at the same time
> exchange rate was changing, stock price was changing etc. My be I sold some
> stock, moved money between USD and Euro accounts
>
> Now at the end of the year I have produced a new balance sheet.
>
> So, I want to be able to explain a delta between a balance sheet at the
> beginning of the ear and at the end.
>
> E.g.:
>
> I got so much salary
> I paid so much costs
>
> But also:
> Lost so much due to exchange rate change
> Gained to much due to stock price increase etc.
>

My advice would be to enable trading accounts and updating the price
database regularly.

Also always record income and expenses in one currency across all accounts.

You’ll have to book the expenses/income from exchange rate fluctuations
manually when money moves between accounts of different currencies.

Then in the end the trading accounts should yield the gain/loss due to
stock prize changes when selecting nearest in time.

Kind regards

Christian Kluge

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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Chary Chary
In reply to this post by Chary Chary
Hi everyone,

thank you for help, but I just can't make it work.

I try a very simple setup:

Main currency - Euro

1000 USD are moved to checking Account at the beginning of the period.

Exchange rate at the beginning - 1 USD costs 1 Euro

Middle of the year it changes - 1 USD costs 2 Euro

No transactions

Net Worth Barchart  correctly shows increase is Net Worth throughout
the year. However Income statement report does not show any traces on why
net wort has increased now.

Based on my understanding of the Tutorial on multiple currency accounting (
https://www.mathstat.dal.ca/~selinger/accounting/tutorial.html ) I would
expect, that the statement would include line:

Unrealized gain due to USD/Euro exchange rate  - 1000 Euro  or something
similar


Any ideas on how to achieve this with Gnucash?

For illustration I have created simple document with screenshots as well my
test file

https://drive.google.com/open?id=1T3KEhAOkkytyW1Dne0vVs259cv0WxtfK





On Mon, Feb 25, 2019 at 1:02 AM Chary Chary <[hidden email]> wrote:

> Hello everybody,
>
> I just started learning gnucash with the goal to depart from my from my
> Excel-based bookkeeping system with pivot tables, so forgive me if I ask
> stupid question. i think I read pretty much all of the help file, but still
> didn't understand whether the following is possible:
>
> I am just wondering  whether there is a cashflow-like report which shows
> also realized and unrealized gains for certain period
>
> What exactly I mean by this:
>
> Say at the beginning of the year I have produced a Balance Sheet report.
> This report shows how much assets I have, which liabilities and delta
> between them. Suppose at begging of the year I had checking accounts in USD
> and Euro and some stock.
> Throughout the year I was getting salary, paying expenses, at the same
> time exchange rate was changing, stock price was changing etc. My be I sold
> some stock, moved money between USD and Euro accounts
>
> Now at the end of the year I have produced a new balance sheet.
>
> So, I want to be able to explain a delta between a balance sheet at the
> beginning of the ear and at the end.
>
> E.g.:
>
> I got so much salary
> I paid so much costs
>
> But also:
> Lost so much due to exchange rate change
> Gained to much due to stock price increase etc.
>
> So, effectively I need to be able to drill down in the delta in Balance
> Sheet report
>
> Regards.
> Chary
>
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To update your subscription preferences or to unsubscribe:
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If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Christopher Lam
Unfortunately there is *no* income statement type report which will
calculate unrealized gains for you.
Your best bet is to reevaluate periodically using the usual balance sheet.

On Tue, 26 Feb 2019 at 06:28, Chary Chary <[hidden email]> wrote:

> Hi everyone,
>
> thank you for help, but I just can't make it work.
>
> I try a very simple setup:
>
> Main currency - Euro
>
> 1000 USD are moved to checking Account at the beginning of the period.
>
> Exchange rate at the beginning - 1 USD costs 1 Euro
>
> Middle of the year it changes - 1 USD costs 2 Euro
>
> No transactions
>
> Net Worth Barchart  correctly shows increase is Net Worth throughout
> the year. However Income statement report does not show any traces on why
> net wort has increased now.
>
> Based on my understanding of the Tutorial on multiple currency accounting (
> https://www.mathstat.dal.ca/~selinger/accounting/tutorial.html ) I would
> expect, that the statement would include line:
>
> Unrealized gain due to USD/Euro exchange rate  - 1000 Euro  or something
> similar
>
>
> Any ideas on how to achieve this with Gnucash?
>
> For illustration I have created simple document with screenshots as well my
> test file
>
> https://drive.google.com/open?id=1T3KEhAOkkytyW1Dne0vVs259cv0WxtfK
>
>
>
>
>
> On Mon, Feb 25, 2019 at 1:02 AM Chary Chary <[hidden email]> wrote:
>
> > Hello everybody,
> >
> > I just started learning gnucash with the goal to depart from my from my
> > Excel-based bookkeeping system with pivot tables, so forgive me if I ask
> > stupid question. i think I read pretty much all of the help file, but
> still
> > didn't understand whether the following is possible:
> >
> > I am just wondering  whether there is a cashflow-like report which shows
> > also realized and unrealized gains for certain period
> >
> > What exactly I mean by this:
> >
> > Say at the beginning of the year I have produced a Balance Sheet report.
> > This report shows how much assets I have, which liabilities and delta
> > between them. Suppose at begging of the year I had checking accounts in
> USD
> > and Euro and some stock.
> > Throughout the year I was getting salary, paying expenses, at the same
> > time exchange rate was changing, stock price was changing etc. My be I
> sold
> > some stock, moved money between USD and Euro accounts
> >
> > Now at the end of the year I have produced a new balance sheet.
> >
> > So, I want to be able to explain a delta between a balance sheet at the
> > beginning of the ear and at the end.
> >
> > E.g.:
> >
> > I got so much salary
> > I paid so much costs
> >
> > But also:
> > Lost so much due to exchange rate change
> > Gained to much due to stock price increase etc.
> >
> > So, effectively I need to be able to drill down in the delta in Balance
> > Sheet report
> >
> > Regards.
> > Chary
> >
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>
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If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Chary Chary
Christopher,

thanks.

But I must say, I still have a sneaky feeling, that I may be missing
something, because I just don't understand how people who deal with several
currencies and who have stock can possibly live without such report, which
would show unrealized gains.

Without report with unrealized gains you have a situation, that you have
some balance at the beginning, balance at the end, but you have no report,
which would show how you got from balance at the beginning to balance at
the end. Even though all your individual transactions are balanced, if you
add them all together they will not produce a delta between balance sheets,
in case you deal with  more then one currency or have stock / gold
(anything).

In a very simple situation:

Say I want to report in EUR, but I keep money in USD. Say I have 1000 USD
and exchange rate was 1:1 at the beginning.
So, starting balance sheet will say, that I have 1000 EUR
Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a sudden
balance sheet at the closing will show, that I now have 2000 EUR.
But how did happen?
I would then expect some line, saying something like: "unrealized gain due
to USD/EUR" exchange rate changes"  - 1000 EURO.

The same applies to stock changes.

Am I talking some nonsense? How do people manage their finance without such
analysis in our modern world?

On Tue, Feb 26, 2019 at 1:49 PM Christopher Lam <[hidden email]>
wrote:

> Unfortunately there is *no* income statement type report which will
> calculate unrealized gains for you.
> Your best bet is to reevaluate periodically using the usual balance sheet.
>
> On Tue, 26 Feb 2019 at 06:28, Chary Chary <[hidden email]> wrote:
>
>> Hi everyone,
>>
>> thank you for help, but I just can't make it work.
>>
>> I try a very simple setup:
>>
>> Main currency - Euro
>>
>> 1000 USD are moved to checking Account at the beginning of the period.
>>
>> Exchange rate at the beginning - 1 USD costs 1 Euro
>>
>> Middle of the year it changes - 1 USD costs 2 Euro
>>
>> No transactions
>>
>> Net Worth Barchart  correctly shows increase is Net Worth throughout
>> the year. However Income statement report does not show any traces on why
>> net wort has increased now.
>>
>> Based on my understanding of the Tutorial on multiple currency accounting
>> (
>> https://www.mathstat.dal.ca/~selinger/accounting/tutorial.html ) I would
>> expect, that the statement would include line:
>>
>> Unrealized gain due to USD/Euro exchange rate  - 1000 Euro  or something
>> similar
>>
>>
>> Any ideas on how to achieve this with Gnucash?
>>
>> For illustration I have created simple document with screenshots as well
>> my
>> test file
>>
>> https://drive.google.com/open?id=1T3KEhAOkkytyW1Dne0vVs259cv0WxtfK
>>
>>
>>
>>
>>
>> On Mon, Feb 25, 2019 at 1:02 AM Chary Chary <[hidden email]> wrote:
>>
>> > Hello everybody,
>> >
>> > I just started learning gnucash with the goal to depart from my from my
>> > Excel-based bookkeeping system with pivot tables, so forgive me if I ask
>> > stupid question. i think I read pretty much all of the help file, but
>> still
>> > didn't understand whether the following is possible:
>> >
>> > I am just wondering  whether there is a cashflow-like report which shows
>> > also realized and unrealized gains for certain period
>> >
>> > What exactly I mean by this:
>> >
>> > Say at the beginning of the year I have produced a Balance Sheet report.
>> > This report shows how much assets I have, which liabilities and delta
>> > between them. Suppose at begging of the year I had checking accounts in
>> USD
>> > and Euro and some stock.
>> > Throughout the year I was getting salary, paying expenses, at the same
>> > time exchange rate was changing, stock price was changing etc. My be I
>> sold
>> > some stock, moved money between USD and Euro accounts
>> >
>> > Now at the end of the year I have produced a new balance sheet.
>> >
>> > So, I want to be able to explain a delta between a balance sheet at the
>> > beginning of the ear and at the end.
>> >
>> > E.g.:
>> >
>> > I got so much salary
>> > I paid so much costs
>> >
>> > But also:
>> > Lost so much due to exchange rate change
>> > Gained to much due to stock price increase etc.
>> >
>> > So, effectively I need to be able to drill down in the delta in Balance
>> > Sheet report
>> >
>> > Regards.
>> > Chary
>> >
>> _______________________________________________
>> gnucash-user mailing list
>> [hidden email]
>> To update your subscription preferences or to unsubscribe:
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>> If you are using Nabble or Gmane, please see
>> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
>> -----
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
>>
>
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Re: [GNC] Cashflow-like report to show realized and unrealiz

GnuCash - User mailing list
IANAA, but as I understand it, gnucash doesn't track unrealized gains well mostly because traditional accounting isn't focused on unrealized gains. I'm told that accountants want to be certain that the *amount* of what you have is accurate. The value of that is less interesting.

Honestly, the deeper you dig in that hole, the crazier it seems to get. Value as determined by whom? At what time? In what jurisdiction? In which currency? At what exchange rate? All of these will affect a valuation that ultimately is a fantasy. Just ask any art collector...

None of it is real until someone pays for it-- and then you have a transaction to record it. 

David 

 
 
  On Wed, Feb 27, 2019 at 15:50, Chary Chary<[hidden email]> wrote:   Christopher,

thanks.

But I must say, I still have a sneaky feeling, that I may be missing
something, because I just don't understand how people who deal with several
currencies and who have stock can possibly live without such report, which
would show unrealized gains.

Without report with unrealized gains you have a situation, that you have
some balance at the beginning, balance at the end, but you have no report,
which would show how you got from balance at the beginning to balance at
the end. Even though all your individual transactions are balanced, if you
add them all together they will not produce a delta between balance sheets,
in case you deal with  more then one currency or have stock / gold
(anything).

In a very simple situation:

Say I want to report in EUR, but I keep money in USD. Say I have 1000 USD
and exchange rate was 1:1 at the beginning.
So, starting balance sheet will say, that I have 1000 EUR
Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a sudden
balance sheet at the closing will show, that I now have 2000 EUR.
But how did happen?
I would then expect some line, saying something like: "unrealized gain due
to USD/EUR" exchange rate changes"  - 1000 EURO.

The same applies to stock changes.

Am I talking some nonsense? How do people manage their finance without such
analysis in our modern world?

On Tue, Feb 26, 2019 at 1:49 PM Christopher Lam <[hidden email]>
wrote:

> Unfortunately there is *no* income statement type report which will
> calculate unrealized gains for you.
> Your best bet is to reevaluate periodically using the usual balance sheet.
>
> On Tue, 26 Feb 2019 at 06:28, Chary Chary <[hidden email]> wrote:
>
>> Hi everyone,
>>
>> thank you for help, but I just can't make it work.
>>
>> I try a very simple setup:
>>
>> Main currency - Euro
>>
>> 1000 USD are moved to checking Account at the beginning of the period.
>>
>> Exchange rate at the beginning - 1 USD costs 1 Euro
>>
>> Middle of the year it changes - 1 USD costs 2 Euro
>>
>> No transactions
>>
>> Net Worth Barchart  correctly shows increase is Net Worth throughout
>> the year. However Income statement report does not show any traces on why
>> net wort has increased now.
>>
>> Based on my understanding of the Tutorial on multiple currency accounting
>> (
>> https://www.mathstat.dal.ca/~selinger/accounting/tutorial.html ) I would
>> expect, that the statement would include line:
>>
>> Unrealized gain due to USD/Euro exchange rate  - 1000 Euro  or something
>> similar
>>
>>
>> Any ideas on how to achieve this with Gnucash?
>>
>> For illustration I have created simple document with screenshots as well
>> my
>> test file
>>
>> https://drive.google.com/open?id=1T3KEhAOkkytyW1Dne0vVs259cv0WxtfK
>>
>>
>>
>>
>>
>> On Mon, Feb 25, 2019 at 1:02 AM Chary Chary <[hidden email]> wrote:
>>
>> > Hello everybody,
>> >
>> > I just started learning gnucash with the goal to depart from my from my
>> > Excel-based bookkeeping system with pivot tables, so forgive me if I ask
>> > stupid question. i think I read pretty much all of the help file, but
>> still
>> > didn't understand whether the following is possible:
>> >
>> > I am just wondering  whether there is a cashflow-like report which shows
>> > also realized and unrealized gains for certain period
>> >
>> > What exactly I mean by this:
>> >
>> > Say at the beginning of the year I have produced a Balance Sheet report.
>> > This report shows how much assets I have, which liabilities and delta
>> > between them. Suppose at begging of the year I had checking accounts in
>> USD
>> > and Euro and some stock.
>> > Throughout the year I was getting salary, paying expenses, at the same
>> > time exchange rate was changing, stock price was changing etc. My be I
>> sold
>> > some stock, moved money between USD and Euro accounts
>> >
>> > Now at the end of the year I have produced a new balance sheet.
>> >
>> > So, I want to be able to explain a delta between a balance sheet at the
>> > beginning of the ear and at the end.
>> >
>> > E.g.:
>> >
>> > I got so much salary
>> > I paid so much costs
>> >
>> > But also:
>> > Lost so much due to exchange rate change
>> > Gained to much due to stock price increase etc.
>> >
>> > So, effectively I need to be able to drill down in the delta in Balance
>> > Sheet report
>> >
>> > Regards.
>> > Chary
>> >
>> _______________________________________________
>> gnucash-user mailing list
>> [hidden email]
>> To update your subscription preferences or to unsubscribe:
>> https://lists.gnucash.org/mailman/listinfo/gnucash-user
>> If you are using Nabble or Gmane, please see
>> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
>> -----
>> Please remember to CC this list on all your replies.
>> You can do this by using Reply-To-List or Reply-All.
>>
>
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Re: [GNC] Cashflow-like report to show realized and unrealiz

Chary Chary
David,

but the fact is, that gnucash already shows changes due to unrealized
gains  in balance sheet report. It shows all the assets based on the
exchange rate at that moment.

It also shows change in the Net Worth report.

https://drive.google.com/drive/folders/1T3KEhAOkkytyW1Dne0vVs259cv0WxtfK

But there is no report, which explains delta between balance sheet report.
Isn't it strange?

Well at least you gave me one reason - because it is related to
accountancy, which I assume is related to taxes. It is probably not
reasonable to tax somebody on the unrealized gain.

But as a normal person, I would want to be able to dig into the delta
between 2 balance sheet reports, even though I am not paying tax over it.
Is this too much to expect?

Regards.

On Wed, Feb 27, 2019 at 1:47 PM David T. <[hidden email]> wrote:

> IANAA, but as I understand it, gnucash doesn't track unrealized gains well
> mostly because traditional accounting isn't focused on unrealized gains.
> I'm told that accountants want to be certain that the *amount* of what you
> have is accurate. The value of that is less interesting.
>
>
> Honestly, the deeper you dig in that hole, the crazier it seems to get.
> Value as determined by whom? At what time? In what jurisdiction? In which
> currency? At what exchange rate? All of these will affect a valuation that
> ultimately is a fantasy. Just ask any art collector...
>
>
> None of it is real until someone pays for it-- and then you have a
> transaction to record it.
>
>
> David
>
>
> On Wed, Feb 27, 2019 at 15:50, Chary Chary
> <[hidden email]> wrote:
> Christopher,
>
> thanks.
>
> But I must say, I still have a sneaky feeling, that I may be missing
> something, because I just don't understand how people who deal with several
> currencies and who have stock can possibly live without such report, which
> would show unrealized gains.
>
> Without report with unrealized gains you have a situation, that you have
> some balance at the beginning, balance at the end, but you have no report,
> which would show how you got from balance at the beginning to balance at
> the end. Even though all your individual transactions are balanced, if you
> add them all together they will not produce a delta between balance sheets,
> in case you deal with  more then one currency or have stock / gold
> (anything).
>
> In a very simple situation:
>
> Say I want to report in EUR, but I keep money in USD. Say I have 1000 USD
> and exchange rate was 1:1 at the beginning.
> So, starting balance sheet will say, that I have 1000 EUR
> Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a sudden
> balance sheet at the closing will show, that I now have 2000 EUR.
> But how did happen?
> I would then expect some line, saying something like: "unrealized gain due
> to USD/EUR" exchange rate changes"  - 1000 EURO.
>
> The same applies to stock changes.
>
> Am I talking some nonsense? How do people manage their finance without such
> analysis in our modern world?
>
> On Tue, Feb 26, 2019 at 1:49 PM Christopher Lam <[hidden email]
> >
> wrote:
>
> > Unfortunately there is *no* income statement type report which will
> > calculate unrealized gains for you.
> > Your best bet is to reevaluate periodically using the usual balance
> sheet.
> >
> > On Tue, 26 Feb 2019 at 06:28, Chary Chary <[hidden email]> wrote:
> >
> >> Hi everyone,
> >>
> >> thank you for help, but I just can't make it work.
> >>
> >> I try a very simple setup:
> >>
> >> Main currency - Euro
> >>
> >> 1000 USD are moved to checking Account at the beginning of the period.
> >>
> >> Exchange rate at the beginning - 1 USD costs 1 Euro
> >>
> >> Middle of the year it changes - 1 USD costs 2 Euro
> >>
> >> No transactions
> >>
> >> Net Worth Barchart  correctly shows increase is Net Worth throughout
> >> the year. However Income statement report does not show any traces on
> why
> >> net wort has increased now.
> >>
> >> Based on my understanding of the Tutorial on multiple currency
> accounting
> >> (
> >> https://www.mathstat.dal.ca/~selinger/accounting/tutorial.html ) I
> would
> >> expect, that the statement would include line:
> >>
> >> Unrealized gain due to USD/Euro exchange rate  - 1000 Euro  or something
> >> similar
> >>
> >>
> >> Any ideas on how to achieve this with Gnucash?
> >>
> >> For illustration I have created simple document with screenshots as well
> >> my
> >> test file
> >>
> >> https://drive.google.com/open?id=1T3KEhAOkkytyW1Dne0vVs259cv0WxtfK
> >>
> >>
> >>
> >>
> >>
> >> On Mon, Feb 25, 2019 at 1:02 AM Chary Chary <[hidden email]> wrote:
> >>
> >> > Hello everybody,
> >> >
> >> > I just started learning gnucash with the goal to depart from my from
> my
> >> > Excel-based bookkeeping system with pivot tables, so forgive me if I
> ask
> >> > stupid question. i think I read pretty much all of the help file, but
> >> still
> >> > didn't understand whether the following is possible:
> >> >
> >> > I am just wondering  whether there is a cashflow-like report which
> shows
> >> > also realized and unrealized gains for certain period
> >> >
> >> > What exactly I mean by this:
> >> >
> >> > Say at the beginning of the year I have produced a Balance Sheet
> report.
> >> > This report shows how much assets I have, which liabilities and delta
> >> > between them. Suppose at begging of the year I had checking accounts
> in
> >> USD
> >> > and Euro and some stock.
> >> > Throughout the year I was getting salary, paying expenses, at the same
> >> > time exchange rate was changing, stock price was changing etc. My be I
> >> sold
> >> > some stock, moved money between USD and Euro accounts
> >> >
> >> > Now at the end of the year I have produced a new balance sheet.
> >> >
> >> > So, I want to be able to explain a delta between a balance sheet at
> the
> >> > beginning of the ear and at the end.
> >> >
> >> > E.g.:
> >> >
> >> > I got so much salary
> >> > I paid so much costs
> >> >
> >> > But also:
> >> > Lost so much due to exchange rate change
> >> > Gained to much due to stock price increase etc.
> >> >
> >> > So, effectively I need to be able to drill down in the delta in
> Balance
> >> > Sheet report
> >> >
> >> > Regards.
> >> > Chary
> >> >
> >> _______________________________________________
> >> gnucash-user mailing list
> >> [hidden email]
> >> To update your subscription preferences or to unsubscribe:
> >> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> >> If you are using Nabble or Gmane, please see
> >> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> >> -----
> >> Please remember to CC this list on all your replies.
> >> You can do this by using Reply-To-List or Reply-All.
> >>
> >
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists
> for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>
>
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

David Carlson-4
In reply to this post by Chary Chary
Chary,

There are some reports that do show unrealized gains, including the Balance
sheet report, but as I stated in my first post you need to adjust the
detailed settings carefully to get exactly the numbers you want.

Unfortunately, I am not the best person to help you as I have not migrated
to release 3.4, which has reports that are changed from those in earlier
releases.

David Carlson

On Wed, Feb 27, 2019, 4:21 AM Chary Chary <[hidden email]> wrote:

> Christopher,
>
> thanks.
>
> But I must say, I still have a sneaky feeling, that I may be missing
> something, because I just don't understand how people who deal with several
> currencies and who have stock can possibly live without such report, which
> would show unrealized gains.
>
> Without report with unrealized gains you have a situation, that you have
> some balance at the beginning, balance at the end, but you have no report,
> which would show how you got from balance at the beginning to balance at
> the end. Even though all your individual transactions are balanced, if you
> add them all together they will not produce a delta between balance sheets,
> in case you deal with  more then one currency or have stock / gold
> (anything).
>
> In a very simple situation:
>
> Say I want to report in EUR, but I keep money in USD. Say I have 1000 USD
> and exchange rate was 1:1 at the beginning.
> So, starting balance sheet will say, that I have 1000 EUR
> Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a sudden
> balance sheet at the closing will show, that I now have 2000 EUR.
> But how did happen?
> I would then expect some line, saying something like: "unrealized gain due
> to USD/EUR" exchange rate changes"  - 1000 EURO.
>
> The same applies to stock changes.
>
> Am I talking some nonsense? How do people manage their finance without such
> analysis in our modern world?
>
> On Tue, Feb 26, 2019 at 1:49 PM Christopher Lam <[hidden email]
> >
> wrote:
>
> > Unfortunately there is *no* income statement type report which will
> > calculate unrealized gains for you.
> > Your best bet is to reevaluate periodically using the usual balance
> sheet.
> >
> > On Tue, 26 Feb 2019 at 06:28, Chary Chary <[hidden email]> wrote:
> >
> >> Hi everyone,
> >>
> >> thank you for help, but I just can't make it work.
> >>
> >> I try a very simple setup:
> >>
> >> Main currency - Euro
> >>
> >> 1000 USD are moved to checking Account at the beginning of the period.
> >>
> >> Exchange rate at the beginning - 1 USD costs 1 Euro
> >>
> >> Middle of the year it changes - 1 USD costs 2 Euro
> >>
> >> No transactions
> >>
> >> Net Worth Barchart  correctly shows increase is Net Worth throughout
> >> the year. However Income statement report does not show any traces on
> why
> >> net wort has increased now.
> >>
> >> Based on my understanding of the Tutorial on multiple currency
> accounting
> >> (
> >> https://www.mathstat.dal.ca/~selinger/accounting/tutorial.html ) I
> would
> >> expect, that the statement would include line:
> >>
> >> Unrealized gain due to USD/Euro exchange rate  - 1000 Euro  or something
> >> similar
> >>
> >>
> >> Any ideas on how to achieve this with Gnucash?
> >>
> >> For illustration I have created simple document with screenshots as well
> >> my
> >> test file
> >>
> >> https://drive.google.com/open?id=1T3KEhAOkkytyW1Dne0vVs259cv0WxtfK
> >>
> >>
> >>
> >>
> >>
> >> On Mon, Feb 25, 2019 at 1:02 AM Chary Chary <[hidden email]> wrote:
> >>
> >> > Hello everybody,
> >> >
> >> > I just started learning gnucash with the goal to depart from my from
> my
> >> > Excel-based bookkeeping system with pivot tables, so forgive me if I
> ask
> >> > stupid question. i think I read pretty much all of the help file, but
> >> still
> >> > didn't understand whether the following is possible:
> >> >
> >> > I am just wondering  whether there is a cashflow-like report which
> shows
> >> > also realized and unrealized gains for certain period
> >> >
> >> > What exactly I mean by this:
> >> >
> >> > Say at the beginning of the year I have produced a Balance Sheet
> report.
> >> > This report shows how much assets I have, which liabilities and delta
> >> > between them. Suppose at begging of the year I had checking accounts
> in
> >> USD
> >> > and Euro and some stock.
> >> > Throughout the year I was getting salary, paying expenses, at the same
> >> > time exchange rate was changing, stock price was changing etc. My be I
> >> sold
> >> > some stock, moved money between USD and Euro accounts
> >> >
> >> > Now at the end of the year I have produced a new balance sheet.
> >> >
> >> > So, I want to be able to explain a delta between a balance sheet at
> the
> >> > beginning of the ear and at the end.
> >> >
> >> > E.g.:
> >> >
> >> > I got so much salary
> >> > I paid so much costs
> >> >
> >> > But also:
> >> > Lost so much due to exchange rate change
> >> > Gained to much due to stock price increase etc.
> >> >
> >> > So, effectively I need to be able to drill down in the delta in
> Balance
> >> > Sheet report
> >> >
> >> > Regards.
> >> > Chary
> >> >
> >> _______________________________________________
> >> gnucash-user mailing list
> >> [hidden email]
> >> To update your subscription preferences or to unsubscribe:
> >> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> >> If you are using Nabble or Gmane, please see
> >> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> >> -----
> >> Please remember to CC this list on all your replies.
> >> You can do this by using Reply-To-List or Reply-All.
> >>
> >
> _______________________________________________
> gnucash-user mailing list
> [hidden email]
> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>
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Re: [GNC] Cashflow-like report to show realized and unrealiz

csingley
In reply to this post by GnuCash - User mailing list
David wrote
> IANAA, but as I understand it, gnucash doesn't track unrealized gains well
> mostly because traditional accounting isn't focused on unrealized gains.
> I'm told that accountants want to be certain that the *amount* of what you
> have is accurate. The value of that is less interesting.

GAAP care very intensely about valuing assets and unrealized gains.  For
financial assets, with very limited exceptions, mark to market is the law of
the land.  No CPA will attest financial statements that don't fair-value
financial assets.


David wrote
> Honestly, the deeper you dig in that hole, the crazier it seems to get.
> Value as determined by whom? At what time? In what jurisdiction? In which
> currency? At what exchange rate? All of these will affect a valuation that
> ultimately is a fantasy. Just ask any art collector...

Awwww yeah, get you some  FAS 157 <https://www.fasb.org/pdf/aop_FAS157.pdf>  
boyee!!

FASB in fact prescribes a fair-value hierarchy classifying the degree of
sketchiness of your valuations.

You want crazy?  How about those investment banks booking unrealized gains
during the 2008 financial crisis because their outstanding bonds were
plummeting in price... solid Level 1 valuations!! ... and FAS 157 let them
elect to fair-value their *liabilities*, not just their assets.

The rabbit hole can indeed get pretty deep down there at Level 3, but OP is
asking about plain vanilla Level 1 assets (currency & marketable
securities).


David wrote
> None of it is real until someone pays for it-- and then you have a
> transaction to record it.

You are describing the perspective of cash-basis accounting, which is what
we use GnuCash for ... it's useful for things like budgeting & taxes.

GAAP is accrual accounting, and a foundational principle is that the
earnings process is divorced from cash flows.  Noncash transactions tend to
occupy a big chunk of the ledger.  If you want your balance sheet to present
assets at fair value rather than historical cost, you need unrealized gains
to make your income statement tie out to the balance sheet as it rolls
forward.

What this looks like is that, on your chart of accounts, a financial asset
has subaccounts for cost basis and unrealized gain/loss.  There's an
unrealized gain/loss account under income, too, along with a realized
gain/loss account.  When you fair-value an asset, the transaction is split
between the asset subaccount and the income subaccount.  When you close out
a financial asset, you Dr/Cr the unrealized gain/loss account on the income
statement against the realized gain/loss account.  This is in the addition
to splits wiping out the asset subaccounts against
cash/equivalents/receivables.

What OP is running into is a design limitation of GnuCash - it only handles
a single accounting basis, and it is geared toward cash basis, so it's good
for analysis of those types of problem (cash flow, realized gains, etc.)

A long time ago I tried setting up GAAP chart of accounts for securities in
GnuCash, and it was super annoying to work with b/c the lack of automation.

In actual accounting practice, people who need GAAP financial statements
(e.g. anybody who's accounting for investments) set up a chart of accounts
geared toward GAAP, and keep the ledger on that basis.  Then they push a
series of adjusting transactions to transform to tax basis, and another
series of adjusting transactions to transform to statement of cash flows.

Financial software packages tend to implement this functionality in reports
by flagging certain categories of income-statement accounts as with "ignore
this for taxable income".  It gets more complicated for cash flow.

I'm not an accountant, either, but I do have to deal with this stuff, and
no, GnuCash doesn't implement the needed functionality.  It's a fairly
glaring omission if you care about investments, but the amount of work
needed to relax this constraint would be pretty significant, and I don't
think most people care enough to make it happen.  I mean, hell, I've written
my own library to calculate capital gains, and I haven't yet cared enough to
make that happen, either.  You get in hot water with the tax authorities if
your cash-basis accounting isn't just right, but unless you have financial
reporting obligations, the same is not true of GAAP accounting.... so we all
tend to concentrate development effort on cash basis, and end up using
brokerage statements and spreadsheets or scripts for tracking personal
investments.
 
  On Wed, Feb 27, 2019 at 15:50, Chary Chary&lt;chary314@&gt; wrote:  
Christopher-

thanks.

But I must say, I still have a sneaky feeling, that I may be missing
something, because I just don't understand how people who deal with several
currencies and who have stock can possibly live without such report, which
would show unrealized gains.

Without report with unrealized gains you have a situation, that you have
some balance at the beginning, balance at the end, but you have no report,
which would show how you got from balance at the beginning to balance at
the end. Even though all your individual transactions are balanced, if you
add them all together they will not produce a delta between balance sheets,
in case you deal with  more then one currency or have stock / gold
(anything).

In a very simple situation:

Say I want to report in EUR, but I keep money in USD. Say I have 1000 USD
and exchange rate was 1:1 at the beginning.
So, starting balance sheet will say, that I have 1000 EUR
Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a sudden
balance sheet at the closing will show, that I now have 2000 EUR.
But how did happen?
I would then expect some line, saying something like: "unrealized gain due
to USD/EUR" exchange rate changes"  - 1000 EURO.

The same applies to stock changes.

Am I talking some nonsense? How do people manage their finance without such
analysis in our modern world?

On Tue, Feb 26, 2019 at 1:49 PM Christopher Lam &lt;christopher.lck@&gt;
wrote:

> Unfortunately there is *no* income statement type report which will
> calculate unrealized gains for you.
> Your best bet is to reevaluate periodically using the usual balance sheet.
>
> On Tue, 26 Feb 2019 at 06:28, Chary Chary &lt;chary314@&gt; wrote:
>
>> Hi everyone,
>>
>> thank you for help, but I just can't make it work.
>>
>> I try a very simple setup:
>>
>> Main currency - Euro
>>
>> 1000 USD are moved to checking Account at the beginning of the period.
>>
>> Exchange rate at the beginning - 1 USD costs 1 Euro
>>
>> Middle of the year it changes - 1 USD costs 2 Euro
>>
>> No transactions
>>
>> Net Worth Barchart  correctly shows increase is Net Worth throughout
>> the year. However Income statement report does not show any traces on why
>> net wort has increased now.
>>
>> Based on my understanding of the Tutorial on multiple currency accounting
>> (
>> https://www.mathstat.dal.ca/~selinger/accounting/tutorial.html ) I would
>> expect, that the statement would include line:
>>
>> Unrealized gain due to USD/Euro exchange rate  - 1000 Euro  or something
>> similar
>>
>>
>> Any ideas on how to achieve this with Gnucash?
>>
>> For illustration I have created simple document with screenshots as well
>> my
>> test file
>>
>> https://drive.google.com/open?id=1T3KEhAOkkytyW1Dne0vVs259cv0WxtfK
>>
>>
>>
>>
>>
>> On Mon, Feb 25, 2019 at 1:02 AM Chary Chary &lt;chary314@&gt; wrote:
>>
>> > Hello everybody,
>> >
>> > I just started learning gnucash with the goal to depart from my from my
>> > Excel-based bookkeeping system with pivot tables, so forgive me if I
>> ask
>> > stupid question. i think I read pretty much all of the help file, but
>> still
>> > didn't understand whether the following is possible:
>> >
>> > I am just wondering  whether there is a cashflow-like report which
>> shows
>> > also realized and unrealized gains for certain period
>> >
>> > What exactly I mean by this:
>> >
>> > Say at the beginning of the year I have produced a Balance Sheet
>> report.
>> > This report shows how much assets I have, which liabilities and delta
>> > between them. Suppose at begging of the year I had checking accounts in
>> USD
>> > and Euro and some stock.
>> > Throughout the year I was getting salary, paying expenses, at the same
>> > time exchange rate was changing, stock price was changing etc. My be I
>> sold
>> > some stock, moved money between USD and Euro accounts
>> >
>> > Now at the end of the year I have produced a new balance sheet.
>> >
>> > So, I want to be able to explain a delta between a balance sheet at the
>> > beginning of the ear and at the end.
>> >
>> > E.g.:
>> >
>> > I got so much salary
>> > I paid so much costs
>> >
>> > But also:
>> > Lost so much due to exchange rate change
>> > Gained to much due to stock price increase etc.
>> >
>> > So, effectively I need to be able to drill down in the delta in Balance
>> > Sheet report
>> >
>> > Regards.
>> > Chary
>> >
>> _______________________________________________
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Adrien Monteleone-2
In reply to this post by Chary Chary
If the gain is unrealized, then the account balance has not changed.

If you physically (or in a bank account) have USD 1000 at the beginning of the year because you traded EUR 1000 at a 1:1 rate, and at the end of the year, have not done anything with that USD 1000, you still only have USD 1000.

GnuCash might value this at EUR 2000 for the purpose of balancing your books, but what you actually hold has not changed. Your bank isn’t going to report that you now have EUR 2000 instead of USD 1000.

Now, if you trade that USD 1000 back to EUR at the new rate, then and only then will you really have EUR 2000 - a realized gain.

If you are using multiple currencies properly, the USD account should reflect USD 1000, not EUR 2000.

If you want to see why the GnuCash balance sheet might reflect a valuation change on a currency or commodity, turn on Trading Accounts, select them in the report options and also choose the option to show exchange rates.

If you look at the exchange rates for the end of last year balance sheet and new balance sheet, they difference will reflect the value assigned to the ’Trading Gain/Loss’ line.

Keep in mind, except for very special circumstances, for most people, ‘unrealized gains’ are simply a ‘what if’ level of thinking. They do not belong in your books. Only actual realized gains are reflected there. (even being required to ‘mark to market’ would be handled by a transaction to realize any gain/loss)

Regards,
Adrien

> On Feb 27, 2019, at 4:18 AM, Chary Chary <[hidden email]> wrote:
>
> Christopher,
>
> thanks.
>
> But I must say, I still have a sneaky feeling, that I may be missing
> something, because I just don't understand how people who deal with several
> currencies and who have stock can possibly live without such report, which
> would show unrealized gains.
>
> Without report with unrealized gains you have a situation, that you have
> some balance at the beginning, balance at the end, but you have no report,
> which would show how you got from balance at the beginning to balance at
> the end. Even though all your individual transactions are balanced, if you
> add them all together they will not produce a delta between balance sheets,
> in case you deal with  more then one currency or have stock / gold
> (anything).
>
> In a very simple situation:
>
> Say I want to report in EUR, but I keep money in USD. Say I have 1000 USD
> and exchange rate was 1:1 at the beginning.
> So, starting balance sheet will say, that I have 1000 EUR
> Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a sudden
> balance sheet at the closing will show, that I now have 2000 EUR.
> But how did happen?
> I would then expect some line, saying something like: "unrealized gain due
> to USD/EUR" exchange rate changes"  - 1000 EURO.
>
> The same applies to stock changes.
>
> Am I talking some nonsense? How do people manage their finance without such
> analysis in our modern world?


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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

csingley
Adrien Monteleone-2 wrote
> Keep in mind, except for very special circumstances, for most people,
> ‘unrealized gains’ are simply a ‘what if’ level of thinking. They do not
> belong in your books. Only actual realized gains are reflected there.

I don't think "owning investments" counts as very special circumstances...
and for investments, carrying them at historical cost is really the "what
if" thinking.  The entire profession of accountancy has risen up with one
voice to declare loudly that financial assets are worth what you can sell
them for today, and anchoring on your cost basis is bad accounting that
leads to bad decisions.  In fact, Deutsche Bank is currently being widely
shamed in the financial press for just this very sin (refusing to write down
some horrible mortgage deals until they actually disposed of them years
later).

If you buy a stock, and it becomes worthless, you are *actually poorer* even
if you don't realize the loss.  Conversely, try telling long-time Berkshire
Hathaway stockholders that their position deserves a 95% haircut, even if
they can sell their BRK stock today and exchange it for bonds that would pay
an annual income equal to their cost basis in BRK.  Guess they'd better
postpone retirement until they sell their stock... "Using this one weird
accounting trick, he increased his safe retirement withdrawal 10x with the
click of a mouse!  CFPs hate him!!"

Looking only at realized gains can be fine if you just want to report *what
happened*, as for paying taxes.  However, if you want financial reports that
help you decide *what to do*, it's unhelpful to convince yourself that
unrealized gains don't exist.

It's not really "what if" to examine your winners & losers, and decide to
rebalance your portfolio accordingly.  It's not really "what if" to look at
how much in unrealized losses you have to offset realized gains in order to
manage your tax bill.  These are not weird corner cases, they are primary
concerns of the users of these financial reports (like the OP).

They're just a pain to implement.  They're not wrong-headed.


Adrien Monteleone-2 wrote

> If the gain is unrealized, then the account balance has not changed.
>
> If you physically (or in a bank account) have USD 1000 at the beginning of
> the year because you traded EUR 1000 at a 1:1 rate, and at the end of the
> year, have not done anything with that USD 1000, you still only have USD
> 1000.
>
> GnuCash might value this at EUR 2000 for the purpose of balancing your
> books, but what you actually hold has not changed. Your bank isn’t going
> to report that you now have EUR 2000 instead of USD 1000.
>
> Now, if you trade that USD 1000 back to EUR at the new rate, then and only
> then will you really have EUR 2000 - a realized gain.
>
> If you are using multiple currencies properly, the USD account should
> reflect USD 1000, not EUR 2000.
>
> If you want to see why the GnuCash balance sheet might reflect a valuation
> change on a currency or commodity, turn on Trading Accounts, select them
> in the report options and also choose the option to show exchange rates.
>
> If you look at the exchange rates for the end of last year balance sheet
> and new balance sheet, they difference will reflect the value assigned to
> the ’Trading Gain/Loss’ line.
>
> Keep in mind, except for very special circumstances, for most people,
> ‘unrealized gains’ are simply a ‘what if’ level of thinking. They do not
> belong in your books. Only actual realized gains are reflected there.
> (even being required to ‘mark to market’ would be handled by a transaction
> to realize any gain/loss)
>
> Regards,
> Adrien
>
>> On Feb 27, 2019, at 4:18 AM, Chary Chary &lt;

> chary314@

> &gt; wrote:
>>
>> Christopher,
>>
>> thanks.
>>
>> But I must say, I still have a sneaky feeling, that I may be missing
>> something, because I just don't understand how people who deal with
>> several
>> currencies and who have stock can possibly live without such report,
>> which
>> would show unrealized gains.
>>
>> Without report with unrealized gains you have a situation, that you have
>> some balance at the beginning, balance at the end, but you have no
>> report,
>> which would show how you got from balance at the beginning to balance at
>> the end. Even though all your individual transactions are balanced, if
>> you
>> add them all together they will not produce a delta between balance
>> sheets,
>> in case you deal with  more then one currency or have stock / gold
>> (anything).
>>
>> In a very simple situation:
>>
>> Say I want to report in EUR, but I keep money in USD. Say I have 1000 USD
>> and exchange rate was 1:1 at the beginning.
>> So, starting balance sheet will say, that I have 1000 EUR
>> Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a sudden
>> balance sheet at the closing will show, that I now have 2000 EUR.
>> But how did happen?
>> I would then expect some line, saying something like: "unrealized gain
>> due
>> to USD/EUR" exchange rate changes"  - 1000 EURO.
>>
>> The same applies to stock changes.
>>
>> Am I talking some nonsense? How do people manage their finance without
>> such
>> analysis in our modern world?
>
>
> _______________________________________________
> gnucash-user mailing list

> gnucash-user@

> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> -----
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> You can do this by using Reply-To-List or Reply-All.





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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Chary Chary
csingley,

thanks for feedback.  I found the correct report name, which I think I
want. In finance world it is called "Statement of Comprehensive Income"

https://www.investopedia.com/terms/c/comprehensiveincome.asp

===========================
. Comprehensive income includes net income and unrealized income, such as
unrealized gains/losses on hedge/derivative financial instruments and
foreign currency transaction gains/losses. Comprehensive income provides a
holistic view of a company's income not fully captured on the income
statement.
============================

But I am not sure I understand the complexity to calculate it in gnucash.

Once just has to walk through all records in the price database (stock and
currency) and calculate net worth before and after change and log delta as
a transaction in some virtual account.


Regards.



On Wed, Feb 27, 2019 at 6:48 PM csingley <[hidden email]> wrote:

> Adrien Monteleone-2 wrote
> > Keep in mind, except for very special circumstances, for most people,
> > ‘unrealized gains’ are simply a ‘what if’ level of thinking. They do not
> > belong in your books. Only actual realized gains are reflected there.
>
> I don't think "owning investments" counts as very special circumstances...
> and for investments, carrying them at historical cost is really the "what
> if" thinking.  The entire profession of accountancy has risen up with one
> voice to declare loudly that financial assets are worth what you can sell
> them for today, and anchoring on your cost basis is bad accounting that
> leads to bad decisions.  In fact, Deutsche Bank is currently being widely
> shamed in the financial press for just this very sin (refusing to write
> down
> some horrible mortgage deals until they actually disposed of them years
> later).
>
> If you buy a stock, and it becomes worthless, you are *actually poorer*
> even
> if you don't realize the loss.  Conversely, try telling long-time Berkshire
> Hathaway stockholders that their position deserves a 95% haircut, even if
> they can sell their BRK stock today and exchange it for bonds that would
> pay
> an annual income equal to their cost basis in BRK.  Guess they'd better
> postpone retirement until they sell their stock... "Using this one weird
> accounting trick, he increased his safe retirement withdrawal 10x with the
> click of a mouse!  CFPs hate him!!"
>
> Looking only at realized gains can be fine if you just want to report *what
> happened*, as for paying taxes.  However, if you want financial reports
> that
> help you decide *what to do*, it's unhelpful to convince yourself that
> unrealized gains don't exist.
>
> It's not really "what if" to examine your winners & losers, and decide to
> rebalance your portfolio accordingly.  It's not really "what if" to look at
> how much in unrealized losses you have to offset realized gains in order to
> manage your tax bill.  These are not weird corner cases, they are primary
> concerns of the users of these financial reports (like the OP).
>
> They're just a pain to implement.  They're not wrong-headed.
>
>
> Adrien Monteleone-2 wrote
> > If the gain is unrealized, then the account balance has not changed.
> >
> > If you physically (or in a bank account) have USD 1000 at the beginning
> of
> > the year because you traded EUR 1000 at a 1:1 rate, and at the end of the
> > year, have not done anything with that USD 1000, you still only have USD
> > 1000.
> >
> > GnuCash might value this at EUR 2000 for the purpose of balancing your
> > books, but what you actually hold has not changed. Your bank isn’t going
> > to report that you now have EUR 2000 instead of USD 1000.
> >
> > Now, if you trade that USD 1000 back to EUR at the new rate, then and
> only
> > then will you really have EUR 2000 - a realized gain.
> >
> > If you are using multiple currencies properly, the USD account should
> > reflect USD 1000, not EUR 2000.
> >
> > If you want to see why the GnuCash balance sheet might reflect a
> valuation
> > change on a currency or commodity, turn on Trading Accounts, select them
> > in the report options and also choose the option to show exchange rates.
> >
> > If you look at the exchange rates for the end of last year balance sheet
> > and new balance sheet, they difference will reflect the value assigned to
> > the ’Trading Gain/Loss’ line.
> >
> > Keep in mind, except for very special circumstances, for most people,
> > ‘unrealized gains’ are simply a ‘what if’ level of thinking. They do not
> > belong in your books. Only actual realized gains are reflected there.
> > (even being required to ‘mark to market’ would be handled by a
> transaction
> > to realize any gain/loss)
> >
> > Regards,
> > Adrien
> >
> >> On Feb 27, 2019, at 4:18 AM, Chary Chary &lt;
>
> > chary314@
>
> > &gt; wrote:
> >>
> >> Christopher,
> >>
> >> thanks.
> >>
> >> But I must say, I still have a sneaky feeling, that I may be missing
> >> something, because I just don't understand how people who deal with
> >> several
> >> currencies and who have stock can possibly live without such report,
> >> which
> >> would show unrealized gains.
> >>
> >> Without report with unrealized gains you have a situation, that you have
> >> some balance at the beginning, balance at the end, but you have no
> >> report,
> >> which would show how you got from balance at the beginning to balance at
> >> the end. Even though all your individual transactions are balanced, if
> >> you
> >> add them all together they will not produce a delta between balance
> >> sheets,
> >> in case you deal with  more then one currency or have stock / gold
> >> (anything).
> >>
> >> In a very simple situation:
> >>
> >> Say I want to report in EUR, but I keep money in USD. Say I have 1000
> USD
> >> and exchange rate was 1:1 at the beginning.
> >> So, starting balance sheet will say, that I have 1000 EUR
> >> Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a
> sudden
> >> balance sheet at the closing will show, that I now have 2000 EUR.
> >> But how did happen?
> >> I would then expect some line, saying something like: "unrealized gain
> >> due
> >> to USD/EUR" exchange rate changes"  - 1000 EURO.
> >>
> >> The same applies to stock changes.
> >>
> >> Am I talking some nonsense? How do people manage their finance without
> >> such
> >> analysis in our modern world?
> >
> >
> > _______________________________________________
> > gnucash-user mailing list
>
> > gnucash-user@
>
> > To update your subscription preferences or to unsubscribe:
> > https://lists.gnucash.org/mailman/listinfo/gnucash-user
> > If you are using Nabble or Gmane, please see
> > https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
> > -----
> > Please remember to CC this list on all your replies.
> > You can do this by using Reply-To-List or Reply-All.
>
>
>
>
>
> --
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

GnuCash - User mailing list
Chary Chary,

Generally, foreign currency/exchange and derivatives/hedging transactions
belong in the statement of comprehensive income.

Current GAAP mandates that unrealized gain/loss from equity securities be
included on the income statement (usually as "other income").

http://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176167762170&acceptedDisclaimer=true

Companies have been dragging their heels about adopting ASU 2016-01, because
they prefer to keep this volatility off their income statement & stick it
under the statement of comprehensive income (which is much less analyzed b/c
less significant).

However, the FASB has been very insistent about fair valuing all the things,
and running those balance sheet changes through net income.  They view this
as a top priority in updating GAAP.

The people who set the accounting standards (both in USA and globally...
IFRS is similar on this point) are vigorously opposed to the viewpoint that
we should ignore unrealized gains and just value things at cost.  They're
working hard to pull this idea up by the roots, despite some stubborn
opposition.

Happily, free software can hide from their baleful scrutiny and continue to
resist the man.  But we shouldn't be under any illusions that the way we
handle investments in GnuCash represents best accounting practice.  Quite
the opposite is true, really.


Chary Chary wrote

> csingley,
>
> thanks for feedback.  I found the correct report name, which I think I
> want. In finance world it is called "Statement of Comprehensive Income"
>
> https://www.investopedia.com/terms/c/comprehensiveincome.asp
>
> ===========================
> . Comprehensive income includes net income and unrealized income, such as
> unrealized gains/losses on hedge/derivative financial instruments and
> foreign currency transaction gains/losses. Comprehensive income provides a
> holistic view of a company's income not fully captured on the income
> statement.
> ============================
>
> But I am not sure I understand the complexity to calculate it in gnucash.
>
> Once just has to walk through all records in the price database (stock and
> currency) and calculate net worth before and after change and log delta as
> a transaction in some virtual account.
>
>
> Regards.
>
>
>
> On Wed, Feb 27, 2019 at 6:48 PM csingley &lt;

> csingley@

> &gt; wrote:
>
>> Adrien Monteleone-2 wrote
>> > Keep in mind, except for very special circumstances, for most people,
>> > ‘unrealized gains’ are simply a ‘what if’ level of thinking. They do
>> not
>> > belong in your books. Only actual realized gains are reflected there.
>>
>> I don't think "owning investments" counts as very special
>> circumstances...
>> and for investments, carrying them at historical cost is really the "what
>> if" thinking.  The entire profession of accountancy has risen up with one
>> voice to declare loudly that financial assets are worth what you can sell
>> them for today, and anchoring on your cost basis is bad accounting that
>> leads to bad decisions.  In fact, Deutsche Bank is currently being widely
>> shamed in the financial press for just this very sin (refusing to write
>> down
>> some horrible mortgage deals until they actually disposed of them years
>> later).
>>
>> If you buy a stock, and it becomes worthless, you are *actually poorer*
>> even
>> if you don't realize the loss.  Conversely, try telling long-time
>> Berkshire
>> Hathaway stockholders that their position deserves a 95% haircut, even if
>> they can sell their BRK stock today and exchange it for bonds that would
>> pay
>> an annual income equal to their cost basis in BRK.  Guess they'd better
>> postpone retirement until they sell their stock... "Using this one weird
>> accounting trick, he increased his safe retirement withdrawal 10x with
>> the
>> click of a mouse!  CFPs hate him!!"
>>
>> Looking only at realized gains can be fine if you just want to report
>> *what
>> happened*, as for paying taxes.  However, if you want financial reports
>> that
>> help you decide *what to do*, it's unhelpful to convince yourself that
>> unrealized gains don't exist.
>>
>> It's not really "what if" to examine your winners & losers, and decide to
>> rebalance your portfolio accordingly.  It's not really "what if" to look
>> at
>> how much in unrealized losses you have to offset realized gains in order
>> to
>> manage your tax bill.  These are not weird corner cases, they are primary
>> concerns of the users of these financial reports (like the OP).
>>
>> They're just a pain to implement.  They're not wrong-headed.
>>
>>
>> Adrien Monteleone-2 wrote
>> > If the gain is unrealized, then the account balance has not changed.
>> >
>> > If you physically (or in a bank account) have USD 1000 at the beginning
>> of
>> > the year because you traded EUR 1000 at a 1:1 rate, and at the end of
>> the
>> > year, have not done anything with that USD 1000, you still only have
>> USD
>> > 1000.
>> >
>> > GnuCash might value this at EUR 2000 for the purpose of balancing your
>> > books, but what you actually hold has not changed. Your bank isn’t
>> going
>> > to report that you now have EUR 2000 instead of USD 1000.
>> >
>> > Now, if you trade that USD 1000 back to EUR at the new rate, then and
>> only
>> > then will you really have EUR 2000 - a realized gain.
>> >
>> > If you are using multiple currencies properly, the USD account should
>> > reflect USD 1000, not EUR 2000.
>> >
>> > If you want to see why the GnuCash balance sheet might reflect a
>> valuation
>> > change on a currency or commodity, turn on Trading Accounts, select
>> them
>> > in the report options and also choose the option to show exchange
>> rates.
>> >
>> > If you look at the exchange rates for the end of last year balance
>> sheet
>> > and new balance sheet, they difference will reflect the value assigned
>> to
>> > the ’Trading Gain/Loss’ line.
>> >
>> > Keep in mind, except for very special circumstances, for most people,
>> > ‘unrealized gains’ are simply a ‘what if’ level of thinking. They do
>> not
>> > belong in your books. Only actual realized gains are reflected there.
>> > (even being required to ‘mark to market’ would be handled by a
>> transaction
>> > to realize any gain/loss)
>> >
>> > Regards,
>> > Adrien
>> >
>> >> On Feb 27, 2019, at 4:18 AM, Chary Chary &lt;
>>
>> > chary314@
>>
>> > &gt; wrote:
>> >>
>> >> Christopher,
>> >>
>> >> thanks.
>> >>
>> >> But I must say, I still have a sneaky feeling, that I may be missing
>> >> something, because I just don't understand how people who deal with
>> >> several
>> >> currencies and who have stock can possibly live without such report,
>> >> which
>> >> would show unrealized gains.
>> >>
>> >> Without report with unrealized gains you have a situation, that you
>> have
>> >> some balance at the beginning, balance at the end, but you have no
>> >> report,
>> >> which would show how you got from balance at the beginning to balance
>> at
>> >> the end. Even though all your individual transactions are balanced, if
>> >> you
>> >> add them all together they will not produce a delta between balance
>> >> sheets,
>> >> in case you deal with  more then one currency or have stock / gold
>> >> (anything).
>> >>
>> >> In a very simple situation:
>> >>
>> >> Say I want to report in EUR, but I keep money in USD. Say I have 1000
>> USD
>> >> and exchange rate was 1:1 at the beginning.
>> >> So, starting balance sheet will say, that I have 1000 EUR
>> >> Then exchange rate changed and now 1 USD costs 2 EUR. So, all of a
>> sudden
>> >> balance sheet at the closing will show, that I now have 2000 EUR.
>> >> But how did happen?
>> >> I would then expect some line, saying something like: "unrealized gain
>> >> due
>> >> to USD/EUR" exchange rate changes"  - 1000 EURO.
>> >>
>> >> The same applies to stock changes.
>> >>
>> >> Am I talking some nonsense? How do people manage their finance without
>> >> such
>> >> analysis in our modern world?
>> >
>> >
>> > _______________________________________________
>> > gnucash-user mailing list
>>
>> > gnucash-user@
>>
>> > To update your subscription preferences or to unsubscribe:
>> > https://lists.gnucash.org/mailman/listinfo/gnucash-user
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

David Carlson-4
In reply to this post by Chary Chary
On Thu, Feb 28, 2019 at 7:50 AM Chary Chary <[hidden email]> wrote:

> csingley,
>
> thanks for feedback.  I found the correct report name, which I think I
> want. In finance world it is called "Statement of Comprehensive Income"
>
> https://www.investopedia.com/terms/c/comprehensiveincome.asp
>
> ===========================
> . Comprehensive income includes net income and unrealized income, such as
> unrealized gains/losses on hedge/derivative financial instruments and
> foreign currency transaction gains/losses. Comprehensive income provides a
> holistic view of a company's income not fully captured on the income
> statement.
> ============================
>
> But I am not sure I understand the complexity to calculate it in gnucash.
>
> Once just has to walk through all records in the price database (stock and
> currency) and calculate net worth before and after change and log delta as
> a transaction in some virtual account.
>
>
> Regards.
>
>
> While it is probably possible to do that in GnuCash, it is well beyond the
scope of the design of GnuCash.  Particularly generating and tracking all
of the necessary non-cash information in a manner that would satisfy an
auditor who understood what you were doing would be mind-boggling to me.

I doubt that other users here have contemplated stretching GnuCash that
far, and while several of us can help telling you details here and there
about how parts of GnuCash work 'under the hood', you will have to do your
own spadework to craft questions to ask us.

That said, GnuCash is very versatile and many users have figured out ways
to stretch it to do amazing things.

Good luck with your ambitions.
--
David Carlson
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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

Mike or Penny Novack-4
In reply to this post by Chary Chary
On 2/28/2019 8:43 AM, Chary Chary wrote:

> csingley,
>
> thanks for feedback.  I found the correct report name, which I think I
> want. In finance world it is called "Statement of Comprehensive Income"
>
> https://www.investopedia.com/terms/c/comprehensiveincome.asp
>
> ===========================
> . Comprehensive income includes net income and unrealized income, such as
> unrealized gains/losses on hedge/derivative financial instruments and
> foreign currency transaction gains/losses. Comprehensive income provides a
> holistic view of a company's income not fully captured on the income
> statement.
> ============================
>
I think this is what the initial questioner was after BUT not what words
said as this is distinctly NOT "cash flow like". A person/business might
be doing fine with regard to income/expense but be in trouble with cash
flow and vice versa. Those are VERY different things, especially when
unrealized gains are involved.

It is also important to note that for some comparisons, especially
between "net worth" positions, our standard books are of little to no
use except to provide some/most of the components making up net worth to
be added to other components that do not have "book value" (not
exchangeable for money, or not at a fair price)

Annuities would be an example of this (the right to receive a series of
"rents", possibly "ay least x" but otherwise as long as one or more
people are alive). Note that an actuary can compute the "present value"
of such a right, it's what an insurance company would charge you for the
right, but not salable for that amount (annuity sellers being desperate,
they get a raw deal).

Besides annuities there are things like "life tenancies"

Thus if you wanted to describe the equivalent net worth of person you
would take their book net worth and add things like the present value of
any annuities, the estimated value of any life tenancies, etc.  
Especially if some of these "off book" components were large compared to
the book components.

Remember, some of us are faced with choices involving options of this
sort << for example, at retirement, your employer might offer you a
choice >>

Michael D Novack

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Re: [GNC] Cashflow-like report to show realized and unrealized gains / balance sheet delta report

csingley
In reply to this post by David Carlson-4
Setting aside my umbrage at GAAP-related gaslighting... Chary Chary, I think
what you're looking for is a custom report.  I believe GnuCash already
captures all the necessary data, it just doesn't treat unrealized as a
first-class citizen.

But for your purposes as I understand them, GAAP financial statements are
really a bit of a red herring.  You can do a lot better than GAAP compliance
for investment performance reporting!

Sadly, I lack the ability to knock up custom reports in Scheme that would
help fill this gap.  I'd be game to help anybody that does, though.  I'm
pretty familiar with the relevant calculations and their application to
performance reporting (this isn't really very difficult).


David Carlson-4 wrote
> On Thu, Feb 28, 2019 at 7:50 AM Chary Chary &lt;

> chary314@

> &gt; wrote:
>
>> csingley,
>>
>> thanks for feedback.  I found the correct report name, which I think I
>> want. In finance world it is called "Statement of Comprehensive Income"
>>
>> https://www.investopedia.com/terms/c/comprehensiveincome.asp
>>
>> ===========================
>> . Comprehensive income includes net income and unrealized income, such as
>> unrealized gains/losses on hedge/derivative financial instruments and
>> foreign currency transaction gains/losses. Comprehensive income provides
>> a
>> holistic view of a company's income not fully captured on the income
>> statement.
>> ============================
>>
>> But I am not sure I understand the complexity to calculate it in gnucash.
>>
>> Once just has to walk through all records in the price database (stock
>> and
>> currency) and calculate net worth before and after change and log delta
>> as
>> a transaction in some virtual account.
>>
>>
>> Regards.
>>
>>
>> While it is probably possible to do that in GnuCash, it is well beyond
>> the
> scope of the design of GnuCash.  Particularly generating and tracking all
> of the necessary non-cash information in a manner that would satisfy an
> auditor who understood what you were doing would be mind-boggling to me.
>
> I doubt that other users here have contemplated stretching GnuCash that
> far, and while several of us can help telling you details here and there
> about how parts of GnuCash work 'under the hood', you will have to do your
> own spadework to craft questions to ask us.
>
> That said, GnuCash is very versatile and many users have figured out ways
> to stretch it to do amazing things.
>
> Good luck with your ambitions.
> --
> David Carlson
> _______________________________________________
> gnucash-user mailing list

> gnucash-user@

> To update your subscription preferences or to unsubscribe:
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> If you are using Nabble or Gmane, please see
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