Provisions and accruals are accounting terms that recognize liabilities before the amounts are fully known, or payment is due, but they are used in different contexts. A provision is an amount set aside to cover an anticipated future liability or loss. The exact timing or amount of the liability might not be known. Provisions are often used for depreciation on assets, bad debts, or restructuring costs. On the other hand, an accrual represents a liability recognized in the books before it has been billed or cash has been exchanged. Accruals are used for revenues (when a product is sold or service is provided, but the cash hasn't been received) and expenses (when an expense has been incurred but not yet paid or billed). The key point about an accrual is that the exact amount and timing are typically more specific than they’re for a provision.