Liability Increase

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pencil-small.gif     A liability represents an amount the KEMID owes to the institution or another KEMID. It represents a borrowing, perhaps to cover an overdrawn balance or to relieve an expense incurred where the funds to cover the expense were not available. Liabilities are not marketable securities and typically have a security ID that reflects an internal security (beginning with 9 or an alpha character).

exclaim     In the KFS Endowment module, liability units and liability value for a KEMID are inversely related (increasing units = decreasing value). Liabilities are recorded in the holding table as a negative cost, while units held are positive. When you create a Liability Increase e-doc, you enter units and cost as positive numbers, and the system automatically converts the holding cost to a negative number.

The Liability Increase e-doc allows you to increase the holdings of a liability for a specified KEMID. Reducing the number of liability units held decreases the KEMID's liability balance for the KEMID.

 When a liability increase transaction is cash-based, it increases the cash balance of the KEMID, increases the number of liability units held, decreases the liability value or balance, and does not change the overall value of the KEMID. When no cash is involved, the transaction has no effect on the cash balance, but an expense or (more rarely) an income entry is made to the KEMID to offset the increase in the liability balance. This activity changes the overall value of the KEMID.

You may enter only one liability per e-doc. The same liability may be processed to multiple KEMID holding records by entering multiple transaction lines in the document.


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Process Overview