Provision: know need to pay, but dont know how much , Liability of uncertain amount and timing like

contingent that is more unlikely, include bad debt, depreciation and accrued liabilities Liabilities: possible event arising in future that need to pay. Unreliable estimatecontingent liability Unfortunately the term provision is used loosely in practice as in the examples you cite. But for your project, the word provision refers specifically to estimated liabilities for some uncertain future loss. This is the formal definition of a provision in FRS 37 "Provisions, contingent liabilities and contingent assets." An example could be the provision for disposal of the oil rig in the example shown in class this week. I'll talk about it in class next week, or you can read up the text book (chapter 11, pp. 444-445 on contingent liabilities) if you want. In Singapore/IFRS accounting, a "contingent liability" is called a provision if it is reported in the balance sheet, and it is called a contingent liability if it is not reported in the balance sheet, but just mentioned in the footnotes.