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| Subject: provision | |
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Author: reduction value one currency relation to other currencies. |
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Date Posted: 19:38:15 12/27/02 Fri http://www.xrefer.com/entry.jsp?xrefid=449029&secid=.-&hh=1 ----------------------------------------------------------- provision ----------------------------------------------------------- An amount set aside out of profits in the accounts of an organization for a known liability (even though the specific amount might not be known) or for the diminution in value of an asset. Common provisions are for bad debts (see provision for bad debts) and for depreciation (see provision for depreciation) and also for accrued liabilities. According to the UK Companies Act (1981) notes must be given to explain every material provision in the accounts of a limited company. Because of abuses in the use of provision, Financial Reporting Standard 12 was issued in September 1998, in which a provision was defined as a liability that is of uncertain timing or amount, to be settled by the transfer of economic benefits. ----------------------------------------------------------- depreciation ----------------------------------------------------------- 1. The measure of the cost or revalued amount of the economic benefits of a tangible fixed asset that have been consumed during a financial period. This includes the wearing out, using up, or other reduction in the useful economic life of a tangible fixed asset. A provision for depreciation can be computed by means of a number of generally accepted techniques, including the straight-line method, the diminishing-balance method, the sum-of-the-digits method, the production-unit method, and the revaluation method. The depreciation reduces the book value of the asset and is charged against income of an organization in the income statement or profit and loss account. In the UK, Financial Reporting Standard 15 deals with the subject of depreciation in the accounts. 2. The reduction in value of one currency in relation to other currencies. ----------------------------------------------------------- [ Next Thread | Previous Thread | Next Message | Previous Message ] |