This section outlines our policies in respect of the management of both borrowing and other liabilities, including things like interest rate exposure, liquidity, credit exposure and debt repayment. The Local Government Act requires us to adopt a Liability Management Policy, which forms an integral part of the Long Term Plan (which is revised every three years). The Liability Management Policy is due for renew as part of the 2021 Long Term Plan. What is a liability? In financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets (cash etc), provision of services or other yielding of economic benefits in the future. A liability is defined by the following characteristics: Any type of borrowing from persons or banks for improving a business or personal income that is payable during short or long term; A duty or responsibility to others that entails settlement by future transfer or use of assets, provision of services, or other transaction yielding an economic benefit, at a specified or determinable date, on occurrence of a specified event, or on demand; A duty or responsibility that obligates the entity to another, leaving it little or no discretion to avoid settlement; and, A transaction or event obligating the entity that has already occurred.