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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Pam who wrote (28105)	4/27/2005 6:16:52 PM
From: Pam	Read Replies (1) \| Respond to of 60323

Hi Clix, Correction- I just noticed that SNDK's OBS transaction is an operating lease. This means Toshiba/Sandisk have an option to buy the equipment down the road but are not obligated to and most likely they intend to use the equipment for less than the useful life of the equipment. The accounting treatment is a little complicated for me to explain here but you can read it in any finance book. The accounting treatment will depend on the detailed terms of the agreement (and whether it can be treated as an capital lease) which I do not completely know. -Pam