Accounting · Provisions and Reserves
A provision differs from a reserve because a provision is generally created for:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1financing only expansion projects
- 2distributing surplus to shareholders
- 3a known liability or diminution in value whose amount may require estimation✓
- 4strengthening long-term capital base
Correct answer
a known liability or diminution in value whose amount may require estimation
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