Provision is Liability & Assets
This query is : Resolved
16 February 2020
Provision is liability & asset both?
1. We create provision for expected expenses in future. It’s liability.
2. We create provision for expected profit in future. It’s asset.
Please correct if I’m wrong with above statements?
1. We create provision for expected expenses in future. It’s liability.
2. We create provision for expected profit in future. It’s asset.
Please correct if I’m wrong with above statements?
23 May 2020
Provision for expenses is a liability and business needs to take into account such liabilities. However business can not have any provision for profits in the books of accounts. Profits always needs to be accounted when it is realized or accrued but not received)
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