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On a balance sheet, to spread an expense over more than one accounting period. One of the most prominent examples of allocation is depreciation, which spreads the cost of an asset over a certain number of years.


1. To spread systematically a single monetary amount over a number of time periods, usually years. For example, depreciation allocates the cost of a capital asset over its useful life.
2. To distribute cost or revenue throughout a number of operations or products. For example, a business must decide how to allocate the costs of running its headquarters over all its operations to determine the profitability of each of those operations.
References in periodicals archive ?
This case is certainly an indication that field agents are looking deeper into a taxpayer's application of simplified methods when it comes to allocating uniform capitalization costs.
The proposed regulations do not address whether a taxpayer's method of allocating costs constitutes a method of accounting.
The regulations contain no examples of allocating capital gain under a power to adjust.
Triarc said it had also been advised that although this is one permissible method of allocating tax basis, it may not be the only possible way to allocate tax basis.
In its defense, the taxpayer argued that because it had not yet incurred storage and handling costs for this merchandise (the taxpayer properly allocated freight costs), allocating such costs would have been a distortion, violating the clear-reflection-of-income doctrine.
R&D expenses also qualify for the "sub-grouping" allocating rules described above.
The property's basis would be treated as equal to its FMV at contribution for the purpose of allocating items to the noncontributing partners.
This article illustrates one such technique: A detailed model for allocating tolerable misstatement is presented and other applications are suggested.
Reciprocal agreements: Before allocating income to a particular nonresident state, taxpayers should check whether that state has a reciprocal exemption agreement with their resident state.
Rather, it said section 482's effectiveness in allocating income and expense items when foreign corporations are involved would be undermined significantly if section 881 required actual payment.
City of Emeryville--The Waste Board approved allocating $25,000 to have rubberized mats installed under and around playground equipment at Stanford Avenue Park using approximately 3,000 waste tires.

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