Synthetic leases: red flags in retailing
International Journal of Retail & Distribution Management
Article publication date: 1 October 2004
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.
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
Emerald Group Publishing Limited
Copyright © 2004, Emerald Group Publishing Limited