What's the difference between a provision and an accrual in accounting?

An accrual is recorded when you're certain of both the obligation and its exact amount — like an employee's salary for work already done but not yet paid, or an electricity bill that arrives after month-end closes. The amount is known and the timing is known. A provision is recorded when you're confident a liability is probable, but the exact amount or timing is uncertain — like a provision for doubtful debts, or a provision for a possible lawsuit.

Mixing the two up affects how accurate your financial statements are: recording a provision as an accrual can overstate a liability without justification, and the reverse can hide a real one. At RASEEKH, we help you build a clear policy for classifying each item correctly under the relevant accounting standard (IAS 37 for provisions), so your financial statements accurately reflect your real position.