A liability of uncertain timing or amount.

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A liability with uncertain timing or amount. Provisions are made when a company expects to incur an expense but is unsure of the exact timing or amount. Examples include provisions for lawsuits, warranties, and restructuring costs.


• Lawsuit Provision: A company sets aside £100,000 as a provision for a potential lawsuit settlement.

• Warranty Provision: An electronics manufacturer makes a provision of £50,000 for possible product warranty claims.