This paper presents a method of including the effect, of unknown initial conditions in the general algorithms for transfer function synthesis recently developed by the authors (Saha and Prasada Rao 1979) via Poisson moment functionals. The proposed technique is of considerable practical importance in problems of parameter identification in which input-output data is available on an arbitrary but active interval of time. The technique is tested with process data containing zero mean noise and is found to be remarkably immune to such noise.