Warranty obligations create provisions when past events produce probable outflows and a reliable estimate can be made. A warranty is a collateral contractual promise concerning goods that creates a claim for damages but not a right to reject; it may be attached to the sale price. Warranty-related obligations qualify as a provision when a past event creates a present obligation, an outflow of resources is probable, and a reliable estimate of the amount can be made, permitting recognition of a liability contemporaneous with the obligating sale.