All or portions of liabilities can be reversed. For example, a liability instruction issued to a nominee in error can be reversed such that the nominee is no longer be responsible for the full amount owed on the liability. Alternatively a portion of a liability can be reversed, e.g., one liability instruction line item as part of a liability instruction can be reversed, such that the nominee is no longer responsible for the reversed line item but is still responsible for the outstanding amount on the liability instruction.
When a liability instruction line item is reversed, the liability amount is negated rather than deleted from the system. This is for accountability and traceability purposes. A new reversal instruction line item is created to cancel the amount of the liability instruction line item. The reversal instruction line item is automatically allocated toward the liability instruction line item. This updates the outstanding amount of the liability instruction line item to zero. The reversal instruction line item is rolled up into a reversal instruction.
If the liability instruction line item was allocated toward before it was reversed, these allocations are once again made available to be applied toward other outstanding liabilities. In order to make this possible, the system automatically creates a reversal instruction line item for each allocation and rolls up the instruction line item or items into a reversal instruction. These reversal instruction line items can be allocated toward any of the nominee's remaining liabilities.