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Agree with the answer of our colleague "Srinivasn".
A provision is in fact not a form of savings, though it may appear so at first glance.
In accounting, provisions are recognised on the balance sheet and also expensed on the income statement. The resulting impact of a provision is a reduction in the company's equity.
Setting aside a provision
There are a number of factors that could cause a company to create provisions, however there are certain criterions that must be fulfilled before a financial obligation can be viewed as a provision, such as:
The company must perform a reliable amount of regulatory measurement of that obligation. The measurement must be made by company management.
It must be probable that the obligation results in a financial drag on economic resources.
An obligation must be a result of events that will advance the balance sheet date, and could result in a legal or constructive obligation.
An obligation must be determined to be probable, but not certain. It must be estimated to have a more than 50% probability of occurring.