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Synthetic leases: red flags in retailing

Jack G. Kaikati (Southern Illinois University, Edwardsville, Illinois, USA)

International Journal of Retail & Distribution Management

ISSN: 0959-0552

Article publication date: 1 October 2004

Abstract

Synthetic leases, used by some retailers to finance rapid expansion, could be ticking time bombs that might blow up anytime in the USA. This paper has three objectives. First, it provides an overview of the financing technique in the USA by tracing its origin and pin‐pointing its advantages and drawbacks. It shows that the drawbacks tend to outweigh the benefits. Second, it discusses how some retailers were red‐flagged for using it and how they responded to such undesirable exposure. The third objective is to highlight the more stringent accounting regulations recently imposed by the Financial Accounting Standards Board (FASB) on synthetic leases in the USA.

Keywords

Citation

Kaikati, J.G. (2004), "Synthetic leases: red flags in retailing", International Journal of Retail & Distribution Management, Vol. 32 No. 10, pp. 476-481. https://doi.org/10.1108/09590550410558617

Publisher

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Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited