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What is the difference between provision & reserve?

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Question ajoutée par ahmed nabil , Lecturer in the special status , Registration books
Date de publication: 2014/03/16
Utilisateur supprimé
par Utilisateur supprimé

provisions is fir potential or sure decress in asset value,  reserve is avoiding part of profit to support the capital 

Ali Hammad Naeem
par Ali Hammad Naeem , Chief Executive Officer , Concern Worldwide Media Clicks (Pvt.) Limited Chattha Group of Travels

Provision means you foresee certain receipts as bad debts

Reserves means you kept funds to avoid those uncertain receipts

syed waseem Iqbal
par syed waseem Iqbal , Senior Accountant , Pacific Exim (pvt) ltd

reserve is an appropriation of profits for a specific purpose. The most common reserve is a capital reserve, where funds are set aside to purchase Fixed assets.

A provision is the amount of an expense or reduction in the value of an asset that an entity recognizes in its accounting system, before it has precise information about the exact amount of the expense or reduction. For example, bad bebts

Rashad Moursi
par Rashad Moursi , Finance Director & Business Development, International Business Transformer Owners Repr. - Hotels , Investment and financial

A Provision is refers to money written off to cover possible depreciation of assets and other liabilities. Such write-offs also cover the expected losses and contingencies of a company.

A reserve is profits that have been appropriated for a particular purpose. Reserves are sometimes set up to purchase fixed assets pay an expected legal settlement, pay bonuses, pay off dept, pay for repairs and maintenance, and so forth.

In short, a reserve is an appropriation of profit for a specific purpose, while a provision is a charge for an estimated expense.

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