Specific Provision

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Dictionary term

Definition of "Specific Provision"

With reference to Islamic banks, it is an amount set aside to reflect an estimated impairment of value of a specific type of asset. In the case of receivables, the amount is that required to write down the asset to its cash equivalent value, namely the amount expected to be collected. In cases of financing and investment assets, it is the amount needed to write the asset down to cash equivalent value if this is lower than the cost. See also general provision.


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