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When your Mana Shield or Mage Ward absorbs damage your spell damage is increased by 10/20% of the amount absorbed for 10 sec. In addition, when your Mana Shield is destroyed, all enemies within 6 yards are knocked back 12 yards.
Incanter's Absorption is a Magetalent in the Arcane tree. When you absorb damage with [Mana Shield] or [Mage Ward], this talent turns a percentage of that damage into spell power, placing a buff on you. Also when [Mana Shield] is destroyed enemies within 6 yards are knocked back 12 yards.
This talent is very usefull on fights with static aura (especially arcane/fire/frost) which deals damage to player like Sindragosa. At 80 level with 250 ilvl gear [Mana Shield] and [Mage Ward] absorbs about 4000k. With simple math [(2*4000)*0,2]=[8000*0,2]=1600 You get 1600 bonus spell power for 10 seconds!
Also with recent changes in Patch 4.0.1, which added knockback effect this talent it's much more useful in PvP environment.
Patch changes
Patch 4.0.1 (2010-10-12): This talent is now a Tier 4 and 2 Ranks talent, down from Tier 7 and 3 Ranks. Now increases your spell damage by 10/20% (Up from 5/10/15%) when Mana Shield or Mage Ward absorbs damage. In addition, when your Mana Shield is destroyed, all enemies within 6 yards are knocked back 12 yards.
Patch 3.3.3 (2010-03-23): This talent now only grants additional spell power when damage is absorbed by Mana Shield, Frost Ward, Fire Ward, or Ice Barrier. The limit of 5% of the mage's health on the spell power buff has been removed.
Patch 3.0.8 (2009-01-20): Only adds spell power absorbed up to 5% of the mage's total health.