Case study: foreign currency you bought and spent

You paid an exchange company for foreign currency. Your statement shows the rupees leaving. It cannot show the hotel, the taxi and the meals you paid for with that currency a month later, because none of that touched a Pakistani bank.

So the app is left holding a half-truth, and it is worth being blunt about which half:

• What it knows. You swapped rupees for currency. That is not spending — you still have the money, just in another form — so it is filed under Debit > Asset Acquisition > Foreign Currency Purchase and does not count as an expense.
• What it cannot know. Whether you spent it. And until you say, you are shown as still holding currency you may have used up, and the trip it paid for is in none of your figures.

Both errors point in opposite directions, so your reconciliation can still balance while being wrong twice. That is why rows like this now carry a flag.

Which of the two situations is yours

A — You bought it and still have it. Currency in a drawer, or in a foreign account, kept as a store of value.

B — You bought it to spend, and spent it. A trip, a course fee, a supplier abroad.

They are treated completely differently, and doing both is the one thing that will definitely be wrong: your wealth statement would count the currency and your figures would count the spending, for the same money.

Situation A — bought and still held

Nothing to record beyond what is already there.

1. Leave the purchase as Debit > Asset Acquisition > Foreign Currency Purchase.
2. Add it to your asset list when prompted — the row will say it is not on there yet. Record it at what it cost you in rupees, not at today's rate. A wealth statement is at cost throughout.
3. That is all. It is not an expense and never becomes one while you hold it.

If you later sell it back for rupees, that is a disposal: record the rupees you received and the difference against cost is a gain or a loss.

Situation B - bought it and spent it

The honest way to record this is to treat the currency as a second pocket of money, exactly the way cash in hand already works. The rupees did not vanish when you bought riyals; they moved. Then they were spent, one purchase at a time, and each of those purchases has a category.

Step by step

1. Register the pocket. Go to Manage accounts -> Add an account,

choose Foreign currency you hold, give the three-letter code (QAR) and name it for what it is - QAR cash (travel). If the currency is notes rather than an account abroad, pick Not a bank (currency you hold) as the bank. Set the opening balance to 0 if you held none at 1 July.

1. Move the money into it. On the ledger, find the purchase - it is the row

filed as Foreign Currency Purchase - and press "Spent it? Move it into a pocket". Choose the pocket and that is all: the app writes the arrival, links the two rows as one movement, and re-files the bank row as a transfer between your own pockets rather than an asset purchase.

That last part is the whole point. Currency you still hold is an asset; currency you spent is a transfer followed by ordinary expenses. Being in both places at once is the one mistake that definitely double-counts, so the app moves it rather than leaving you to remember.

1. Record what you actually spent, as ordinary entries against that pocket,

in rupees at what the currency cost you: - a holiday -> Debit > Household & Living > Travel & Vacations - a work trip -> Debit > Business Expense > Business Travel - anything else -> whatever it really was; the category tree works the same here as anywhere.

1. Whatever is left is what you still hold. The pocket's closing balance at

30 June is the currency still in your possession - put that, and only that, on your asset list. Do not also list the original purchase, or you will count the same money twice.

If you change your mind

Pressing "Still hold it" on the arrival row takes it back: the arrival is removed and the purchase goes back to being an asset. Anything you already entered against the pocket stays where it is, so check it afterwards - it is spending with no money behind it until you move some in again.

Why rupees and not riyals

Every figure in this app is in rupees, and for tax that is the right unit: your wealth statement is at cost, and what a trip cost you is what you paid for the currency. Converting at the rate on the day you spent it would be a second guess on top of a first, and it would make your figures disagree with the only document you have — the receipt from the exchange.

If the exchange rate moved a lot between buying and spending, that difference is a gain or a loss on money you held, not part of the cost of the trip. Worth mentioning to your lawyer if the amount is large; not worth modelling for a holiday.

Situation C — you paid and they gave it back

This happens: an exchange refuses a company account, or a transfer bounces, and the money returns — often from a different account than the one you paid.

That is not currency held and not a trip. It is a payment that was returned, and both sides should cancel so neither counts. See [Case study: money that came back](/help/case-money-returned).

The flag you will see on these rows

A currency purchase carries a marker on the ledger reading "currency — spent or still held?". It does not clear on its own, because it is a question, not a task: only you know which of A or B happened. Once you have followed whichever applies, the row is doing its job and the flag is just a reminder of a decision you already made.

It sits beside a second marker, "not on your asset list", which does clear — that one is a task.