Specific deductions: provisions: examples of allowable provisions
Examples of provisions which will generally be allowable to the extent that they are sufficiently accurate and accord with GAAP include those made:
- in the period of sale for the cost of work under a warranty which a trader gives on the sale of merchandise (or under consumer protection legislation),
- for commission refundable by an insurance intermediary on the lapse of a policy where the commission is recognised as income at the inception of the policy,
- by builders for rectification work, including retentions up to the level that these have been recognised as income within accounts,
- for future maintenance of plant and machinery made in circumstances that appear indistinguishable from those in Johnson v Britannia Airways Ltd  67TC99 (such provisions are however outlawed by Section 21 of FRS102 for assets owned by the business).