Share Based Payments

Hello Sir

I have a doubt for replacing an equity-settled scheme with a cash-settled scheme.

In the SBR Kaplan book the below was mentioned:

An entity may modify the terms of an equity-settled share-based payment
scheme so that it becomes classified as a cash-settled scheme. If this is the
case, IFRS 2 requires the entity to:

Derecognise the liability and recognise equity to the extent of the
services rendered by the modification date.

I don’t understand the part where we derecognise the liability but we are changing the equity settled to cash settled scheme.