Synthetic lease

A synthetic lease is a financing structure by which a company structures the ownership of an asset so that –for financial accounting purposes, the asset is owned by a special-purpose entity and leased to the operating company under an operating lease. The special-purpose entity is usually owned by the lessee / operating company, and is given just enough independence so that it can be taken off the operating company's balance sheet. The asset is thus recorded as an asset on the balance sheet of the special purpose entity, not of the lessee / operating company. Thus, depreciation of the asset need not be charged against income of the operating company. Instead, the lease payments are recorded as an expense on the income statement. for tax purposes, the asset is owned by the operating company. Thus, the operating company can deduct depreciation of the asset for tax purposes, generally on an accelerated depreciation schedule.

This keyword could refer to multiple things. Here are some suggestions: