Explain why the following item is reported as a contingent liability and not as a provision.

‘Under the Value Added Incentive Scheme, which is currently under review by the Board, further amounts may be payable to certain directors and employees. The amounts payable are dependent upon either

• the achievement of future levels of performance; or

• the death or retirement of the individuals; or

• a change of ownership of all or part of the group.

The maximum un-provided amount payable under the Scheme is £1.5m’.