A provision is an amount of money set aside in a company's accounts to cover a future liability or expense that is uncertain in timing or amount. It is a type of reserve that is created to meet a specific expense or loss that is likely to occur in the future. Provisions are typically made for things like warranties, bad debts, or legal claims. By creating a provision, a company can ensure that it has enough funds to cover the expense when it arises and can avoid taking a big hit to its profits in that particular period.