Allocation - Definition

A distribution of costs using calculations that may be unrelated to physical observations or direct or repeatable cause-and-effect relationships. Because of the arbitrary nature of allocations, costs based on cost causal Assignment are viewed as more relevant for management decision-making.

From an economic stand point, the allocation of Resources is a theory concerned with the discovery of how nations, companies or individuals distribute economic resources or inputs in the economic marketplace. Traditional business inputs are land, Labor and Capital. Entrepreneurship or enterprise may also be included in this group since entrepreneurs or enterprises are usually responsible for the allocation of resources. The economic concept of private resource allocation is an important area of study in the free market system and the economic theory known as 'the invisible hand.'

From an investing stand point, allocation refers to the concept of Asset Allocation, which is a part of portfolio management.

Terms near "Allocation"

Allowance for doubtful accounts
Allowance of depreciation
Alternate account
Alternate payee
Alternative asset
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