Glossary
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Provisions
Provisions may be made for expected obligations that cannot be accurately quantified, e.g. warranty cases, damage claims, repairs, litigation. Three conditions must be met: An obligation exists (mandatory), there is no financial equivalent, the obligation is probable.
Provisions are part of the liabilities.
Precautions for renovations, replacements, reorganisations, anniversaries, future projects, further education etc. are not provisions, but reserves. An association can form internal reserves for anniversaries, acquisitions, construction measures, etc. or reserves for payments to third parties: Donations received for a certain project. Reserves are part of the equity.
Provisions are part of the liabilities.
Precautions for renovations, replacements, reorganisations, anniversaries, future projects, further education etc. are not provisions, but reserves. An association can form internal reserves for anniversaries, acquisitions, construction measures, etc. or reserves for payments to third parties: Donations received for a certain project. Reserves are part of the equity.
