Question
What is a synthetic lease?
Interesting Question? 
(3) 
(5)
(3) (5)
Answers (1)
25th Nov 2009 by Amelia Timbers
A synthetic lease is like a lease to oneself. While legal, many jurisdictions may rule arrangements made using synthetic leases illegal. In this case, a firm creates a special purpose vehicle, or a shell company that a larger firm operates to specifically act as a tax shelter or to get unattractive liabilities off the larger firm's books. In a synthetic lease, a special purpose vehicle leases a firm's asset back to the firm. In this way, firms may be able to expoit tax advantages for cash flow. Again, this is not generally recommended by accounting regulators and in many instances can become illegel.
A synthetic lease is like a lease to oneself. While legal, many jurisdictions may rule arrangements made using synthetic leases illegal. In this case, a firm creates a special purpose vehicle, or a shell company that a larger firm operates to specifically act as a tax shelter or to get unattractive liabilities off the larger firm's books. In a synthetic lease, a special purpose vehicle leases a firm's asset back to the firm. In this way, firms may be able to expoit tax advantages for cash flow. Again, this is not generally recommended by accounting regulators and in many instances can become illegel.
Like This Answer? (0) (0)
This answer is the subjective opinion of the writer and not of FinancialAdvisory.com
(0) (0)
17th Nov 2009 In Leasing
1 Answers | 100 Views
Subjects: synthetic lease,