In order that a provision should be recognized in an entity's financial statements, it is necessary that:

The entity has a present obligationan for which outflow of economic benefits will be required.

• Provision is  a liability of uncertain timing or amount. An entity must recognize a provision if, and only if:  * a present obligation (legal or constructive) has arisen as a result of a past event (the obligating event), * payment is probable ('more likely than not'), and * the amount can be estimated reliably.