Lay a piece of 1/2-inch plywood across the attic floor joists near the recessed fixture. This plywood gives you a safe area to walk on. Do not step on the area between the joists.
Measure the length of the space between the joists that houses the fixture. Unroll the insulation and lay it with the paper vapor barrier up. Transfer the measurement onto the insulation.
Hold a level on the insulation with one edge lined up with the measurement mark you made. Press the level down to compress the insulation. Cut through the paper barrier and insulation with a utility knife, using the level as a straight edge.
Measure the length from one of the attic walls to the recessed fixture, in the space between the ceiling joists. Transfer this measurement to the insulation strip you just cut.
Measure the fixture's circumference. Open a compass to the circumference. Trace a circle on the paper vapor barrier. One of the circle's edges should hit the measurement mark you made in Step 4.
Compress the insulation near the circle with one hand and cut out the circle using a utility knife with the other hand. Flip the insulation so the vapor barrier faces the warm side. For example, if you heat your house more than cool it, the vapor barrier would face down toward your living area. Line up the circle over the IC-rated recessed fixture and lower the insulation into the space between the joists.