Synthetic Lease

AAA

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 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 TERMS
  1. Graduated Lease

    A type of long-term, typically for commercial property, lease ...
  2. Lease

    A legal document outlining the terms under which one party agrees ...
  3. Leaseback

    An arrangement where the seller of an asset leases back the same ...
  4. Operating Lease

    A contract that allows for the use of an asset, but does not ...
  5. Working Capital

    This ratio indicates whether a company has enough short term ...
  6. Price-To-Cash-Flow Ratio

    The ratio of a stock’s price to its cash flow per share. The ...
Related Articles
  1. Top 8 Ways Companies Cook The Books
    Personal Finance

    Top 8 Ways Companies Cook The Books

  2. New Wheels: Lease Or Buy?
    Home & Auto

    New Wheels: Lease Or Buy?

  3. Uncovering Hidden Debt
    Bonds & Fixed Income

    Uncovering Hidden Debt

  4. Advanced Financial Statement Analysis
    Options & Futures

    Advanced Financial Statement Analysis

comments powered by Disqus
Hot Definitions
  1. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
  6. Floating Exchange Rate

    A country's exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that ...
Trading Center