Definition : Liability

Asset having a negative economic value for a syndicate of co-owners. Liabilities include financial obligations to a third party such as accounts payable and other debts.

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CASH BASIS OF ACCOUNTING A cash basis of accounting consist of recording the transactions of the syndicate when the receipt or disbursement related to the transaction occurs. It is a faithful reproduction of the bank statement, broken down into various asset, liabilities, income or expenses accounts. Moreover, instead of talking about income and expenses, one should speak of receipts and disbursements. This basis of accounting has many limitations.
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The syndicate acts as a legal person bringing together all the co-owners of the building and not each of them individually. The Civil Code of Quebec (C.c.Q.) provides that the syndicate of co-owners arises, by operation of law, at the time of publication of the declaration of co-ownership in the Land register. With the powers devolved to it by law and exercised by its two decision-making bodies, it thus expresses the autonomy of the community of co-owners. As a result, the co-owners are third parties to the syndicate. The assets of the syndicate are thus distinct from those of each co-owner. Despite the collective nature of this type of co-ownership, the legislator has not attributed to the syndicate the ownership of the common portions, which is distributed among the co-owners according to the relative value of their fraction.
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