Definition: Insurance or registration first refers to a principle in accounting that allows companies to deduct expenses from profits, while maintaining their tax liability for those same expenses. This means that companies can use these funds to purchase new equipment, invest in marketing or other non-cash items, and reduce their overall operating costs. It is often used in conjunction with other accounting techniques to help ensure the company's financial health and avoid potential liabilities associated with unexpected expenses. For example, let's say a company has $50,000 of taxable income for the year. If they use this money to purchase new equipment that increases their tax liability by $30,000, they would be able to deduct the additional $30,000 from their taxable income without affecting their overall financial position. This principle allows companies to avoid potential penalties and liabilities associated with unexpected expenses while still maintaining profitability and avoiding penalties for non-compliance.

insurance or registration first