From books online:
The scope of a variable is the range of Transact-SQL statements that can reference the variable. The scope of a variable lasts from the point it is declared until the end of the batch or stored procedure in which it is declared.
However. Nothing keeps you from doing this:
create procedure Foo as begin
declare @bob int
if exists (x)
begin
set @bob = 1
end
else
begin
set @bob = 2
end
end