According to PriceWaterhouseCoopers analyst Chris Whitley, oneof two speakers at the event, few things are certain in terms ofsynthetics' future until the FASB unveils its ruling, timed looselyfor when draft wording is okayed. That, says Whitley, may happen aslate as early next year.

He indicated that when the ruling finally hits the streets, itwon't alter the nature of synthetics straight across the board butonly for particular structures. In those cases "Where the lessor isa special-purpose entity and the lessee is the primarybeneficiary," he stated, "we know that those synthetic leases willbe consolidated. If the lessee is not a special-purpose entity,those leases may not be affected." But that may offer small comfortto an industry in which 90% of all synthetics are held by SPEs.

Whitley noted that, while the issue was thrust into thespotlight by Enron's accounting practices, how to deal withsynthetics has been a thorn in the FASB's side for "10 or 15 years.Those efforts have obviously stepped up and "since '01 it's beentrying to solve what it couldn't solve for 15 years--how to dealwith synthetic leases."

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John Salustri

John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.