The standard, and its associated IFRIC interpretations, address settling a financial liability with an _______________.

The standard, and its associated IFRIC interpretations, address settling a financial liability with an equity instrument.

This statement is related to the International Financial Reporting Standards (IFRS), specifically around IAS 32 (Financial Instruments: Presentation). When a company has a financial liability, it may choose to settle that liability not with cash but rather by issuing equity instruments, such as shares. This is an important consideration in accounting, as it has implications for how liabilities and equity are presented on the balance sheet, how financial performance is measured, and how transactions impact ownership interests among shareholders. IFRIC interpretations may clarify the rules and application of these standards to ensure transparency and comparability in financial statements. Understanding these nuances is essential for accountants and financial analysts to properly report financial activities.