Best way to record a Transfer of Cash from CAD to USD

[ThomasK]

Hi Mark,

WIthin a non-registered account here in Canada we have the A side and B side.

A is Canadian and B is American

How do I best record moving cash from the USD side to the CAD side? Vice versa and with exchange rates?

Thanks,
Thomas

(I'm looking at the Transfer Between function but the board posts indicate this is not the best way)

[Mark]

Hi Thomas,

Your USD cash account should be assigned to the USD currency, and your Canadian cash should be assigned to your Canadian currency. This is under "Investment Properties...".

When you transfer money, just record a sell of cash in one cash investment, and a buy of cash in the other. Both are done at a price of 1, in the currency assigned to each cash account. When dealing with cash it is simpler to just use buys/sells instead of transfers. Transfers are really meant when you need a different cost basis date/value than the transferred market value/date. For cash this doesn't matter, so just using buys/sells is simplest. All cash transactions should be done at a price of 1, and the shares equal to the value.

[ThomasK]

Interesting.

What I did originally was to set up the CAD cash holding. From there I bought the USD cash holding. Selling USD goes back to CAD automatically in the system, with a system generated note. Cool.

What about the currency exchange? I tried it a few times with checking the box lower left but the cash going back into CAD is the same as that was sold as USD.

Am I doing something wrong or do I just change the CAD numbers manually, to account for the exchange rate?

[Mark]

Hi ThomasK,

The amount going back to your default cash account should be recorded according to your exchange rate. If you sell $1,000 USD, and you enter an exchange rate of 2 USD = 1 CAD, you should see a buy of CAD 500 in your default cash account. Note, if you have "View / Exchange Rate Adjusted" turned on, all your amounts are being displayed in your default currency.