What is Contingency provision (provisão de contingência)?

A contingency provision is the amount set aside on the balance sheet for probable losses in litigation (IAS 37 / CPC 25). The risk classification — probable, possible or remote — determines whether the loss is provisioned, merely disclosed or ignored.

Provisioning for the worst case ties up cash needlessly; an understated provision surprises the bottom line. The right point is the real risk, case by case.

How LABORIS AI uses it

LABORIS AI estimates the provision from exposure weighted by the probability of conviction — the number controllership takes to the balance sheet.