The term 'Provision' means to write off or retain any amount by depreciation, renewal, or diminution in asset value, or by making available for any known liability an amount that has not been determined with sufficient accuracy can be done. Provisions in accounting refer to the amount that is generally put aside from the profit in order to meet a probable future expense or a reduction in the asset value although the exact amount is unknown. To qualify as a provision in accounting, the funds must be for a specific purpose, such as to offset the decrease in an assets value. Important PointsA provision stands for liability of uncertain time and amount. Provisions include warranties, income tax liabilities, future litigation fees, etc. They appear on a companys balance sheet