Financial liability

IAS 32 defines a financial liability as liability that is any of the following:

1. A contractual obligation either to:

• Deliver cash or another financial asset to another entity; or
• Exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the reporting entity.

2. A contract that will or may be settled in the reporting entity's own equity instruments, and is either:

• A non-derivative for which the entity is or may be obliged to deliver a variable number of the reporting entity's own equity instruments; or
• A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the reporting entity's own equity instruments.

See also

• Amortised cost
• Financial asset
• Financial instrument
• Derivative
• IAS 32
• Liabilities