Liability account
A liability account is the long-term reflection of a group's financial standing. Only Departments, clubs and design teams’ have liability accounts; this is because their money does not directly come from the EUS Operating Budget. All EUS does is provide accounting services (though these groups may benefit from the various funds). During the year, their transactions are processed through an internal account, whose net balance is deducted from the liability account at the end of the year.
- Liability account: Your group's "safe"
- Internal account: EUS "safe"
The Internal account essentially allows for higher cashflow. Instead of a group being alimited to what they have available in their liability account (their safe), they're able to make larger expenses through the EUS. This is because sources of revenue frequently require proof of purchase after the fact, among other things.
Example
- Your liability account has $1000 at the beginning of 2018.
- Your internal account has a balance of -$250 at the end of the fiscal year
- The $250 loss will be applied to your liability account, resulting in a final balance of $750 in "your safe"
- Your liability account has $750 at the beginning of 2019
Guardianship
You are not allowed to have your liability account in the negative. When that happens, your organisation will be place under guardianship.