Provisions recognition requires present obligation, probable outflow and reliable estimate before recognising liabilities under accounting standards. Ind AS 37 requires recognition of a provision only when a present legal or constructive obligation from a past event exists, an outflow of resources is probable, and a reliable estimate can be made; otherwise the item is a contingent liability or contingent asset to be disclosed. Measurement is the best estimate of the expenditure to settle the obligation at the reporting date, using expected value for large classes, considering risks and uncertainties, discounting when material, and recognising reimbursements as separate assets only when virtually certain.