When the choice of the manner of settlement lies with the employee, the instrument in question might be considered a compound financial instrument with both debt and equity components under IFRS 2. In such cases, it's essential to determine the fair value of both the debt and equity components, as the classification and measurement of the instrument can have implications for the accounting treatment. Therefore, the statement "the fair value of the debt and equity components does not need to be determined" is not always true when the settlement choice rests with the employee. However, the concept of a compound instrument in IFRS 2 is relevant, and the instrument would indeed be treated as a compound financial instrument with debt and equity components, depending on the specific terms and conditions of the plan.