Provisions are liabilities of uncertain timing or amount that arise from past events. According to IAS 37, a provision should be recognized when:

• An entity has a present obligation (legal or constructive) as a result of a past event.
• It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.
• The amount of the obligation can be estimated reliably.

Examples of provisions include warranty obligations, environmental cleanup costs, and restructuring costs.

Contingent Liabilities:
Contingent liabilities are possible obligations that arise from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. A contingent liability is not recognized in the financial statements but is disclosed unless the possibility of outflow of resources is remote.

Examples of contingent liabilities include potential legal claims or guarantees.

Contingent Assets:
Contingent assets are possible assets that arise from past events, which will only be confirmed by the occurrence of uncertain future events not wholly within the control of the entity. Similar to contingent liabilities, contingent assets are not recognized in the financial statements until realization is virtually certain but should be disclosed when the inflow of economic benefits is probable.

Examples of contingent assets include claims for damages that have not yet been settled or potential recoveries from pending lawsuits.