07 February 2010
Provision means any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets, or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy. Best eg. provision for Bad debts which is created in case of failure to receive the payments from the debtors.
Reserve are essentially setting aside a certain amount of money for some purpose. Often times, reserves are set aside to act as a buffer against future losses. They are not kept for any known laibility and can be utilized for any purpose according to the laws and procedures.
Fund is created by contibution with the amount which is kept aside for a specific purpose, eg. Building Fund is for constructing or maintaining Building.
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