A Study On The Changes And Effects Of International Leasing Accounting Standards

In August 2010, the IASB and FASB jointly issued The Lease Exposure Draft, and in June 2013, this two Boards once again revised The Lease Exposure Draft after studying and discussing the feedbacks seriously, which is from all of the world. For Chinese Leasing industry, it has a great significance to take The Lease Criterion as a study, traced back to its history, analyze its real situation and make a picture of future.The Accounting, one of four pillars, is a very important character for rental business. The Lease Accounting, which made a division of operating lease and finance, not only affected the scale of rental business, but also made rental business developed. In some way, it is difficult to find an industries like rental business in which the Accounting could be so significant to affect its development. From this perspective, studying the impact of Lease Exposure Draft on Financial Report is an important stage of the Lease Accounting reform in our country.For analyzing the New Lease Criterion’s influence to industry, it needs two key words: one is understanding the contents of The Draft correctly, the other is analyzing the influence to Financial Reports correctly. Based on the new method of recognition and measurement of Lease Exposure Draft, the paper make an adjustment to three major financial statements of four public company which is Air China, China Southern Airlines, China Eastern, and Cathay Pacific. Then the paper make a conclusion about how the Lease Exposure will make a change to the operation of an Airline Company by analyzing this adjusted financial statements, and how it will affect whole Leasing industry.The Lease Exposure Draft will make a huge effect to current Lease Accounting Standards. On the one hand, the Lease Exposure Draft will change the enterprise accounting policy, and it will reclassify the types of leasing transactions. Two-in-one lease type, what put forward means Operating Lease and Finance Lease passed away. And at the same time, the measure of initial cost will be changed. On the other hand, the Lease Exposure Draft will bring a huge effect to the financing market. Currently, due to vanish of the Operating Lease, which can make loan for enterprise and has no trail on balancesheet. Without the Operating Lease, more financing will be demanded, and enterprises will keep its eyes on financial institutions loan. So, financing structure in the market will be changed. Overall, the Lease Exposure Draft will bring a huge effect to the industry including financial market.The Revision of The Lease of International Standards has become an irreversible trend. In May 2013, the chairman of International Accounting Standards Board, reiterated the necessity of the Revision of International Accounting Standards, especially for The Lease. And he expressed his determination. The concept of "Right to leased property" will meets the economic essence, and it also improve the quality of Accounting Information which should be asked for. In the background of Accounting Internationalization and International convergence of Accounting, the Revision of Lease Criterion is the common mission for all countries including China. According to the actual lease conditions of Chinese, which in macroscopic and microscopic, the Chinese should make a strategy for the change. It can be summarized as: accepting the basic concepts, discussing the lease’s knowledge, examining the process of convergence.