In the International Financial Reporting Standards (IFRS), the treatment of provisions (as well as contingent assets and liabilities) is found in IAS 37.
Examples of common provisions are: income tax liability, product warranty, environment restoration, etc.
In case of an executory contract, IAS 37 does not apply and neither an asset nor a liability is recorded.
This is because these expenditures relate to the future conduct of the business and are thus not liabilities for restructuring to be recognized at the end of the reporting period.
[7] the objectives of provision are to be for all expenses and losses even when the amount of such In American English, the word provision is used as a synonym for "expense", especially when it appears in a phrase that refers to the income tax cost incurred by a business during an income statement period.