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Is there any difference between reserves and provisions ?

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Question ajoutée par Asim Azaldeen Abdalrahman Mhammed , Property Manager , TAAM PROPERTY
Date de publication: 2014/11/08
Zubair Jahangir
par Zubair Jahangir , Cost Accountant , Rotana Hotels

Reserve is created against the charge of the profit and loss appropriation account.

Reserves are created to meet an unknown liability, or to strengthen the financial position of the company or for equalization of dividends. A reserve is created only when there is profit in the business.

 

Provision is created against the charge of profit and loss account.

It is created to meet a known liability or a specific contingency, e.g.. provision for bad and doubtful debts, or provision for depreciation etc and we can created irrespective of whether there is profit or loss in the business.

 

 

 

Ahmed kandil
par Ahmed kandil , Cost Controller , Battour Holding Cpompany

RESERVE : created to face emergency situations ( not for certain asset or liability ) 

provision: created against uncertain in the value of known liability or asset

Utilisateur supprimé
par Utilisateur supprimé

I Don't Know What Is The Provision Mean?

sorry

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