The answer mentions the following shown below but with the use of phrases like ” contingent settlement provision” and “occurrence of an event which is very unlikely to occur” i don’t understand how it relates to the question. Kindly explain.
“A contingent settlement provision which requires settlement in cash or variable number of the entity’s own shares only on the occurrence of an event which is very unlikely to occur is not considered to be genuine and, hence, an instrument including such a provision would be an equity instrument (IAS 32)..”