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When a firm acknowledge a risk could exist and chooses to pay for any loss with...

When a firm acknowledge a risk could exist and chooses to pay for any loss with cash on hand, what is this called?
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Owing to the conservatism concept of accounting, businesses are required to acknowledge any probable losses or future risks and account for the same in current year's financial statements in the form of provision. Provision is an amount kept aside from a company;s profits to take care of an expected emergency/liability/loss that might happen in the future, the exact amount pertaining to which is not known. Provisons are recorded in the Balance sheet as well as in the Income statement in order to adhere to the matching concept of accountign which states that all expenses of an accounting period must be matched against the revenues of that period.

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