Research On The Expected Impact And Strategy Of The Reform Of Lease Standards

Lease is an important activity for obtaining finance. Therefore, it plays a more and more important role in economic development. With the development of lease, the lease accounting is becoming more and more important. However, lease standard is known as one of "the five worst quality accounting standards". On the one hand, the vast majority of lease contracts contain important financing factor, but the assets and liabilities associated with lease are not recognized in the balance sheet. As a result, the financial statements do not provide a faithful representation of lease transactions. On the other hand, the existing lease accounting requirements depend on the bright-line test, which reduces comparability for users.There’s a great growth in leasing sales of China in recent years and our accounting standards have achieved international convergence. It means that if there’s adjustment in the international lease standards, the Chinese lease accounting will adapt to the changes. In order to better address the impact of international lease standard reform, the essay researches on the Chinese accounting standard setting mechanisms, entities, tax departments and regulatory authorities.The essay consists of six parts:The first part, introduction, overviews the background of this study, reviews of the existing materials, summarizes the main content and points out the innovations and deficiencies.The second part, the theoretical basis of lease accounting, consists of lease definition and economic nature, modern property rights theory, accounting information quality and game theory.The third part, the trend of international lease reform, includes the criticisms of IAS17, contrast between the exposure draft of lease standards and the IAS17, and evaluation of the exposure draft.The fourth part, the existing lease standards and the impact of international lease standard, firstly analyzes the existing Chinese accounting lease standard and mainly describes the impact on the Chinese accounting standard setting mechanisms, entities, tax departments and regulatory authorities.The fifth part, the strategy to confront with the lease reform, analyzes the detailed strategies that the Chinese accounting standard setting mechanisms, entities, tax departments and regulatory authorities take.The sixth part, the conclusions and expectations, summarizes the main conclusion of this essay and predicts the future research directions.Based on the research, it indicates that the existing lease standard has some drawbacks. So it’s necessary to conduct lease reform. To conclude, the lease accounting reform has great positive impacts. Once the Chinese accounting standard setting mechanisms, entities, tax departments and regulatory authorities cooperate, the lease reform will succeed.