ICAEW.com works better with JavaScript enabled.

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

IFRIC 19 addresses the accounting by an entity which issues equity instruments in order to settle, in full or part, a financial liability.

Access the interpretation

Registration is required to access the free version of the Issued Standards. This version does not include additional documents that accompany the full standards (such as illustrative examples, implementation guidance and basis for conclusions).


IFRIC 19 provides accounting guidance where a financial liability is extinguished by the issue of equity instruments, often referred to as a debt for equity swap. The Interpretation provides guidance for the accounting treatment to be applied by the issuer of the equities (the debtor).

In this situation the equity instrument issued is measured at fair value; where fair value can’t be measured reliably, measurement should reflect the fair value of the liability extinguished. Any difference between the financial liability extinguished and the measurement of the equity instruments is recognised in profit or loss.

Where the issue of an equity instrument only part extinguishes the financial liability, the debtor must consider whether any consideration relates to the modification of the remaining liability. If it does, the fair value of the equity instrument issued must be allocated between the extinguished liability and the remaining liability.

If the remaining liability is substantially modified, then it must be derecognised and a new liability recognised.

Recent amendments

Log in to read more

These resources are available exclusively to Corporate Reporting Faculty subscribers, ICAEW members and students.

ICAEW factsheets and guides

The Corporate Reporting Faculty's annual IFRS factsheets provide a more detailed discussion of recent IFRS amendments.

Other resources

Further support

Financial reporting helpsheets
Corporate reporting resources

Practical resources including factsheets, online guides, helpsheets, webinars, eBooks and articles.

Browse the collections
Black woman working at computer
Technical Advisory Services

Our experienced advisors can help you with technical questions.

Get in touch
Young man reading in a library
Library and Information Service

Expert help with research and access to trustworthy, professional sources.