Synthetic Lease

Dictionary Says

Definition of 'Synthetic Lease'

An operating lease that is structured in a way so that it is not recorded as a liability on the balance sheet. Instead, it is considered to be an expense on the income statement.
Investopedia Says

Investopedia explains 'Synthetic Lease'

Basically, a synthetic lease allows a company to control real estate without being required to show the real estate as an asset on the financial statements

Related Definitions

  • Lease

    An agreement in which one party gains a long-term rental agreement, and the other party receives a form of secured long-term debt.
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  • Leaseback

    An arrangement where the seller of an asset leases back the same asset from the purchaser. In a leaseback arrangement, the specifics of the arrangement are made immediately after the ...
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  • Operating Lease

    A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset.
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