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Reserve is created and charge to the profit and loss appropriation account. The purpose of creating reserve is to strengthen the financial position and to meet future growth, unknown losses and liabilities.
Whereas Provision is created and charge to the profit and loss account. Objective of provision is to meet known losses and liabilities the amount of which is not certain.
Resverve : some portion of profit which company set a side for some purpose.
Provision : Recording of any type of expense which is estimated to be incurred in future.
Reserve; An amount set aside from part of profit for specific purpose.. or for to purchase anyfixced asset.
Provsion: an amount from expense and reduction in asset value.
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