Why not we must to created Provision & Reserve?
And if we're not to recognized what the effect will be?
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Answer / Nimmi Singh
Provisions and Reserves are essential in accounting to account for potential liabilities or uncertain future events. Creating provisions ensures that a company's financial statements reflect its true and fair view, while reserves help in smoothing out the company's earnings over time. If not recognized, it may lead to an inaccurate representation of the company's financial position, which could have adverse effects on stakeholders such as investors, creditors, and employees.
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