Difference between Provisions and Accruals
This query is : Open
13 March 2010
please any one clarify me the difference between Provisions and Accruals.
13 March 2010
Before make provisions the expenses or liability has beed accured. so first accural then provisions
13 March 2010
para 12(b) prescribes the difference between Provisions and Accruals:
accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees.
ALTHOUGH IT IS SOMETIMES NECESSARY TO ESTIMATE THE AMOUNT OF ACCRUALS, THE DEGREE OF ESTIMATION IS GENERALLY MUCH LESS THAN THAT FOR PROVISIONS.
this para has confused me.
accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees.
ALTHOUGH IT IS SOMETIMES NECESSARY TO ESTIMATE THE AMOUNT OF ACCRUALS, THE DEGREE OF ESTIMATION IS GENERALLY MUCH LESS THAN THAT FOR PROVISIONS.
this para has confused me.
13 March 2010
it prescribes that,
Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees.
if this is Accrual, what is provision.
Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees.
if this is Accrual, what is provision.
13 March 2010
You may take.Accural which is arrived accuratley based on the documents
Provision just estimation based on the expenses & income recognation
Provision just estimation based on the expenses & income recognation
14 March 2010
Provision and accrual are both way of expensing out once the liability has accrued.
Provisions are also made only if the good & services have been received and the liablity has accrued.
If the liability can not be certainly be estimated then it becomes part of contingent liability.
Provisions are also made only if the good & services have been received and the liablity has accrued.
If the liability can not be certainly be estimated then it becomes part of contingent liability.
17 March 2010
Can it be defined as below? (as per my understanding)
Provisions are liability, measured with substantial degree of estimation, for which till the date of balance sheet Goods or services have not been received.
Accruals are liability for the goods or services received till the date of balance sheet, but amount is not agreed exactly.
Provisions are liability, measured with substantial degree of estimation, for which till the date of balance sheet Goods or services have not been received.
Accruals are liability for the goods or services received till the date of balance sheet, but amount is not agreed exactly.
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