Prudence concept (conservatism)

if an entity is dragged to court by a customer at yr end, but the case is pending in court

so at year end Reporting date, if we see the chances of entity losing that case is more than 50% (probable) we will recognize that loss immediately by debiting the St of P/L reducing the profit for the yr and creating a provision.

same way we provide allowance for receivables, where if entity feels there is some doubtful debts at yr ending, we should recognize that loss in current yr only and create allowance.

Is this because of the PRUDENCE concept, that any losses/expenses expected to occur in Future should be recognized immediately in Current accounting year only, rather than waiting for that

am i right sir?