R&D

What “law” are you referring to? And have you posted this to the correct forum? This is Audit and Assurance. The two questions you ask concern Financial Accounting (FA/F3).

1. When money is spent on anything the Q is – is it a revenue expense (recognised in the statement of profit or loss) or is it a capital expense (recognised as an asset in the statement of financial position). Accounting standards are strict about asset recognition and IAS 38 Intangible Assets has specific criteria for the recognition of R&D as an asset. Pure research must always be expensed immediately. Development costs must be capitalised if all of a number of criteria are met – if not all met, then expense. You will find the criteria in Chapter 21 of the FA notes.

2. “Accruals” is the basis of accounting which is not cash accounting – it means recognising expense (usually) or revenue (relatively rarely) in the accounting period to which it relates (i.e. it has “happened”) – the cash is paid/received in the next accounting period. You will find examples of accrued expenses in Chapter 4 of the FA notes.
Typical accrued expenses include rent, electricity, telephone, bank overdraft interest, etc.
A provision is a liability which arises when something happens during the year (a “past event”) which creates an obligation of uncertain timing and/or amount. For example, a company sells goods with a warranty/guarantee to repair them if they breakdown during some specified future period. At each reporting date the company must make a best estimate of the liability (i.e. the amount that might be paid in the future) to settle claims made in respect of goods sold during the year.

A company has a y/e 30 June 2019:
1. The last invoice for telephone/rent/electricity (whatever) was for a period ending 30 April (say). The company must “accrue” (literally meaning to accumulate over time) two months’ of expense (for May-June).
2. I have already given you an example of a provision – for warranties. Say the company sells coffee makers with a one-year guarantee for refund if returned as faulty during that time. At 30 June 2019, management must estimate how many coffee makers MAY be returned after 30 June 2019 in respect of sales made during the year.
Both are liabilities and both are accounting estimates. The difference is the degree of uncertainty – 1. is very low because the expense has been incurred and it’s only necessary to make a time-apportioned estimate (e.g. 2/3rds of the next quarter’s invoice or use a monthly average amount). Uncertainty is much higher because it’s impossible to know exactly what proportion of goods well develop a fault in 12 months and, even if they do, to know what proportion of customers will be bothered to return the goods for a refund, etc.