General provisions

Why are General provisions/reserves classified as liabilities? I would think they should be classified as equity (unless one has raised debt for creating the provision). Aren’t reserves usually created from the retained earnings?

reserves are sometimes debited against the asset account i.e. bad debt, warranty etc, some are liabilities for law suits etc, its more of a conservative acc practice

reserves/provisions against contingent liabilities. you add to liabilities section of B/S to be conservative (i.e. add 5M to Liab and sub 5 M from Equ if you have a 5M lawsuit pending)