A liability instruction line item can be reversed so that the nominee is no longer responsible for the liability amount. For example, if an employer is billed incorrectly, the incorrect liability instruction line item can be reversed so that the employer no longer owes the liability amount.
When a liability is reversed, the liability amount is negated rather than deleted from the system. This is for accountability and traceability purposes. A reversal instruction line item is created for every instruction line item that was included in the liability.
In an integrated financial environment, canceling a liability follows the same process as described above for canceling a payment.
If any allocations have been made to the liability instruction line item before it was reversed, it is the responsibility of the ERP financial system to ensure that these allocations are once again made available to be applied toward other outstanding liabilities.