yes, when the foreign exchange rate results in a reduction of value of asset recorded in prior years.
e.g. If the exchange reserve was in credit side last year, it could result in debit side in current year if the foreign exchange rate happens in an opposite way as it was in last year with an overwhleming rate.
It depends on HOW the exchange reserve is created. Remember exchange reserve is a cumulative account which may go credit this year, and then debit in next year if the rate changes adversively.
E.g. if the exchange reserve was resulted from translating net investment from a foreign subsidiary, exchange differences should be recorded in Other Compenhensive Income (Equity) until disposal of the subsidiary during when exchange diff. should go to P&L.
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