Dictionary of Accounting Terms: absorb
absorb
- to assimilate, transfer, or incorporate amounts in an account or a group of accounts in a manner in which the first entity loses its identity and is "absorbed" within the second entity. Examples include the sequential transfer of xpenditure account amounts to work-in-process (WIP), finished goods, and cost of sales.
- to distribute or spread costs by the process of proration or allocation. See also absorption costing.
Dictionary of Business Terms: absorb
absorb
Business:cost not passed on to a customer; also a firm merged into an acquiring company.
Cost accounting:indirect manufacturing costs (such as property taxes and insurance), called absorbed costs.
Finance:account that has been combined with related accounts in preparing a financial statement and has lost its separate identity.
Securities:issue an underwriter has completely sold to the public.
