Provision for Depreciation on assets, Provision for Repairs and Renewals of assets. Provision for Taxation, Provision for Discount on Debtors, Provision for Bad and Doubtful Debts. Reserves are the amount set aside out of profits. Examples are General Reserves, Dividend Equalization Reserve etc.
Depreciation can be defined as the share of total asset that has been consumed by the company over a certain period of given time. The total number of profit and loss statement of Depreciation is based on the usefulness of the fixed assets used in the accounting year.
Reserves refer to the amount that is set aside out of profits and other surpluses to meet future uncertainties. In other words, a reserve is meant for meeting any unknown liability or losses in the future.
Provision:-The amount retained by way of providing for any unknown liability of which the amount cannot be detained with substantial accuracy.