Comment 5 for bug 1194978

Hello Amit & Naresh

Here is the reason why we, at vauxoo, regard this behavior as a bug,

From Wiley
13 ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS AND HEDGING FOREIGN EXCHANGE RISK
page 16 in document [1] says:

"
...
The FASB reasoned that users of financial statements are best served by reporting the effects of
exchange rate changes on a firm's financial position in the accounting period in which they occur,
even though they are unrealized and may reverse or partially reverse in a subsequent period,
...
"

Fasb in document [2] Page 8, Section Foreign Currency Transactions says:

"
...
Foreign currency transactions may produce receivables or payables
that are fixed in terms of the amount of foreign currency that will be received or paid. A change
in exchange rates between the functional currency and the currency in which a transaction is
denominated increases or decreases the expected amount of functional currency cash flows upon
settlement of the transaction. <b> That increase or decrease in expected functional currency cash
flows is a foreign currency transaction gain or loss that generally shall be included in
determining net income for the period in which the exchange rate changes.</b>

...

"

IASB/IFRS in document [3] page 2 says:

'''
...
A foreign currency transaction shall be recorded, on initial recognition in the functional currency, by applying
to the foreign currency amount the spot exchange rate between the functional currency and the foreign
currency at the date of the transaction.

At the end of each reporting period:
(a) foreign currency monetary items shall be translated using the closing rate;
(b) non-monetary items that are measured in terms of historical cost in a foreign currency shall be translated
using the exchange rate at the date of the transaction; and
(c) non-monetary items that are measured at fair value in a foreign currency shall be translated using the
exchange rates at the date when the fair value was measured.

<b>Exchange differences arising on the settlement of monetary items or on translating monetary items at rates
different from those at which they were translated on initial recognition during the period or in previous
financial statements shall be recognised in profit or loss in the period in which they arise.
</b>
...
'''

Taking into account the knowledge that is available regarding recording transactions in foreign currencies
and considering that we, all OpenERP Community People, want our Openerp Suite be the best and stick to
the best practices available when it comes to accounting and IFRS recording, we want to enforce that this
behavior that is regarded by us as wrong be fixed, if help is wanted we are available to keep this channel open
and cooperate in the means that are meant necessary

Please can you make available the branch for this bug,

Thanks in advance

[1] http://www.wiley.com/college/bcs/0471173975/ch13.doc

[2] http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable=MungoBlobs&blobkey=id&blobwhere=1175820909452&blobheader=application%2Fpdf
[3] http://www.ifrs.org/Documents/IAS21.pdf