1> Audit fee payable is specific, as the same is known at the time of passing the entry.
2.> Provision for Audit Fee is just a provision which may or may not differ on actual receipt of bills. So its just a provision made by you to book the exp, for which you have not recd any bills, but it pertains to the current period.
11 January 2011
Provision is the amount set when there is reasonable certain that any thing is future will require outflow of cash, on the basis of best estimate available.
However expense is the amount incurred and liable to be paid.
Provision is made before occurrence on the expense, but Expenses Payables happens after occurrence of expense.
Provision is not a liability but Expenses Payables is a liability.
A company creates Expenses Payables on the basis of best evidence available , but is Expenses Payables always certain.
CAclubindia
