Provisions Agent
Calculate, value and post provisions - from leave to litigation costs.
Identifies provision types, calculates leave and bonus provisions deterministically, escalates warranty and litigation cost provisions for human valuation and creates notes disclosures.
Score Dashboard
What This Agent Does
Provisions bridge the gap between rule-based calculation and commercial judgement. Leave provisions (remaining entitlement times daily rate) and bonus provisions (contract times result) are fully deterministic. Warranty provisions and litigation cost provisions, however, require human estimation based on experience and legal assessment.
The Decision Layer breaks the provisioning process into eight decision steps and defines for each whether human, rule engine or AI decides. The provision type is automatically classified. Calculable provisions are determined deterministically. Valuation provisions (warranty, litigation risk) are prepared with prior-year values and development data, but the decision remains with the human.
Prior-period provisions are automatically reviewed: unchanged ones are retained, those to be released are prepared. Provisions with changed circumstances are escalated for revaluation. Notes disclosures are prepared as LLM drafts.
Micro-Decision Table
Identify provision type What type of provision is this? Rules Engine
Categorisation (leave, bonus, warranty, litigation, restoration)
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Calculate leave provision What is the leave provision per employee? Rules Engine Auditor
Remaining entitlement times daily rate - fully deterministic
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Challengeable by: Auditor
Calculate bonus provision What is the bonus provision? Rules Engine Auditor
Contractual terms plus current result - deterministic
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Challengeable by: Auditor
Estimate warranty provision How high is the warranty risk? Human Auditor
Experience, current claims rates, commercial judgement
Decision Record
Challengeable: Yes - via manager, works council, or formal objection process.
Challengeable by: Auditor
Assess litigation cost provision How high is the litigation cost risk? Human Auditor
Legal assessment of likelihood of success and damages amount
Decision Record
Challengeable: Yes - via manager, works council, or formal objection process.
Challengeable by: Auditor
Review prior-period provisions Should existing provisions be released, adjusted or retained? Human Auditor
Unchanged facts rule-based (R), revaluation human (H)
Decision Record
Challengeable: Yes - via manager, works council, or formal objection process.
Challengeable by: Auditor
Create journal entry What are the journal entries for formation, release and adjustment? Rules Engine Auditor
Posting logic: expense to provisions, provisions to income
Decision Record
Challengeable: Yes - rule application verifiable. Objection possible for incorrect data or wrong rule version.
Challengeable by: Auditor
Draft notes disclosures Which notes disclosures are required for provisions? AI Agent Auditor
LLM draft of notes disclosures based on provision data
Decision Record
Challengeable: Yes - fully documented, reviewable by humans, objection via formal process.
Challengeable by: Auditor
Decision Record and Right to Challenge
Every decision this agent makes or prepares is documented in a complete decision record. Affected parties (employees, suppliers, auditors) can review, understand, and challenge every individual decision.
Prerequisites
- ERP system with provisions module or separate provisions tool
- Personnel master data for leave provisions (remaining leave, daily rate)
- Contract data for bonuses (basis, percentage)
- Legal assessments for litigation provisions
- Historical warranty data for estimation basis
Governance Notes
Mixed decision distribution (2H / 4R / 1A / 1 R/H). Human decisions for warranty and litigation cost provisions - both require judgement and are balance-sheet-relevant. HGB Paragraph 249 (obligation to provide), HGB Paragraph 253 (valuation) and EStG Paragraph 6 Abs. 1 Nr. 3a (tax valuation) as direct legal bases.
GoBD-compliant: every provision is documented with calculation basis, method applied and result. Discretionary decisions (warranty, litigation) are archived with the clerk's rationale. During tax audits, provisions are a frequent focus, especially the appropriateness of valuations. Paragraph 203 StGB relevant: provisions can reveal litigation risks and internal conflicts.
§203 StGB-relevant data is encrypted end-to-end and never passed to AI models in plain text.
Process Documentation Contribution
Infrastructure Contribution
The Provisions Agent establishes the pattern for hybrid agents: calculable parts fully automated, valuation decisions with the human. This pattern is reused by the Revenue Recognition Agent, Journal Entry Agent and other agents with discretionary components. The prior-period review (retain vs. adjust vs. release) is a reusable pattern for all balance sheet items that require regular review. Builds Decision Logging and Audit Trail used by the Decision Layer for traceability and challengeability of every decision.
Does this agent fit your process?
We analyse your specific finance process and show how this agent fits into your system landscape. 30 minutes, no preparation needed.
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Revenue Recognition Agent
Revenue recognition per IFRS 15 - from contract analysis to disclosure note.
Frequently Asked Questions
Can the agent also calculate IFRS provisions per IAS 37?
Yes. The agent supports both HGB Paragraph 249 and IAS 37. The difference lies in valuation (HGB: most likely amount, IFRS: expected value for multiple scenarios). The rule engine is configured per applicable accounting standard.
How are onerous contract provisions handled?
Onerous contract provisions per HGB Paragraph 249 Abs. 1 are maintained as a separate category. Calculating the anticipated loss requires human assessment of contract risk. The agent prepares the data basis (contract value, current costs, remaining effort).
What happens when a litigation provision proves unfounded?
The agent reviews at every close whether the prerequisites for existing provisions still hold. When the basis ceases (e.g. litigation won), the release is prepared and submitted for approval.
What Happens Next?
30 minutes
Initial call
We analyse your process and identify the optimal starting point.
1 week
Discover
Mapping your decision logic. Rule sets documented, Decision Layer designed.
3-4 weeks
Build
Production agent in your infrastructure. Governance, audit trail, cert-ready from day 1.
12-18 months
Self-sufficient
Full access to source code, prompts and rule versions. No vendor lock-in.
Implement This Agent?
We assess your finance process landscape and show how this agent fits your infrastructure.