Which of the following statements best describes the principle for classifying an issued financial instrument as either a financial liability or equity?
(a) Issued instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement and the definitions of a financial liability, financial asset, and an equity instrument.
(b) Issued instruments are classified as liabilities or equity in accordance with the legal form of the contractual arrangement and the definitions of a financial liability and an equity instrument.
(c) Issued instruments are classified as liabilities or equity in accordance with management’s designation of the contractual arrangement.
(d) Issued instruments are classified as liabilities or equity in accordance with the risk and rewards of the contractual arrangement.