A financial liability is any liability that is:

1) a contractual obligation:

i) to deliver cash, or another financial asset, to another undertaking; or

ii) to exchange financial assets, or financial liabilities, with another undertaking under conditions that are potentially unfavourable (unprofitable) to the undertaking; or

2) a contract that will, or may, be settled in the undertaking's own equity instruments and is:

i) a non-derivative for which the undertaking is or may be obliged to deliver a variable number of the undertaking's own equity instruments; or

ii) 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 undertaking's own equity instruments.

According to IAS 32, a financial liability is any liability that is:

1. A contractual obligation to deliver cash or another financial asset to another entity
2. A contractual obligation to exchange financial assets or liabilities with another entity under conditions that are potentially unfavorable to the entity
3. A contract that will or may be settled in cash or another financial asset
4. A contract that will or may be settled by the entity delivering its own equity instruments, and is not classified as an equity instrument of the entity itself
5. A written put option or call option that obligates the entity to purchase or sell a financial asset or financial liability for cash or another financial asset

In simpler terms, a financial liability is any obligation to pay money or deliver financial assets to another entity. Examples of financial liabilities include loans, bonds, accounts payable, and financial derivatives such as options and futures contracts. The classification of financial liabilities is important for accounting purposes, as different types of financial liabilities are subject to different accounting rules and regulations.