How to disclose effect of exchange rate fluctuations on cash held in a cash flow statement

 According to IAS 7 par 25-28, cash flows arising from transactions in a foreign currency shall be recorded in an entity's functional currency by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the cash flow. The treatment of exchange differences depend on whether they relate to operations, investing, or financing activities. The accounting treatment also depends on whether the foreign exchange difference relates to foreign operation or not. The cash flows of a foreign subsidiary shall be translated at the exchange rates between the functional currency and the foreign currency at the dates of the cash flows. Unrealised gains and losses arising from changes in foreign currency exchange rates are not cash flows. The effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the statement of cash flows in order to reconcile cash and cash equivalents at the beginning and the end of the period. 

1. How to disclose foreign currency exchange difference relating to operating activities whether realized or not

Foreign currency exchange in profit or loss is matched with the foreign exchange movement in working capital and hence there is no need to separately disclose foreign currency on operating activates. However some companies may strip the foreign currency from profit or loss and disclose is as a reconciling item.

2. How to disclose foreign currency exchange difference relating to financing activities whether realized or not

You are required to strip the foreign currency exchange from profit or loss and disclose the actual cash received or paid on financing activities. Hence there is no need for foreign currency exchange being disclosed as reconciling item.

3. How to disclose foreign currency exchange difference relating to investing activities whether realized or not

You are required to strip the foreign currency exchange from profit or loss and disclose the actual cash received or paid on investing g activities. Hence there is no need for foreign currency exchange being disclosed as reconciling item.

4. How to disclose foreign currency exchange difference relating to foreign operation

The effect of exchange rate changes on opening balances cash and cash equivalents held or due in a foreign currency is reported in the statement of cash flows in order to reconcile cash and cash equivalents at the beginning and the end of the period.