Research On The Reform Of International Leases Standard And Its Expected Impact On China

This paper is about the study of the reform of international leases standard, using normative research and case studies, which conducts an in-depth analysis for the latest papers for the reform of international leases standard. This paper starts with the relevant theories of leasehold and accounting standards, and then analyzes the main content of the reform of the international leases standard and its effect on China’s companies. On this basis, the proposed leases accounting model and the convergence policy recommendations of leases standard are given.The reform of the international leases standard starts from 2006, which has released a version of discussion paper "Leases:preliminary views" (2009) and two versions of exposure draft (2010 and 2013). Since March 2014, the IASB has also published a series of papers on the latest decisions. I found domestic scholars usually study the reform of international lease standards based on 2010 and 2013 exposure draft, and when it comes to the latest documents released after 2014, there has no scholars studied. Therefore, the main object of this study is the latest documents since March 2014 the International Accounting Standards Board (IASB) released, combined with two versions of exposure drafts and the staff papers, to evaluate the impact of the reform.This paper both uses the normative research method and the case study method. Firstly, the normative research is used for the analysis of relevant theories of leasehold and accounting standards, which lays theoretical foundation for the comments of the lease accounting standards reform; Secondly, the main contents of the reform are analyzed and commented, and then case studies are used to analyze the expected impacts on China’s companies. Lastly, the opinions are given on the reform of the international lease standard, combined with the difficulty may be encountered during the convergence criteria and the proposed policy recommendations.The following conclusions are summarized. Firstly, the whole reform of international leases standard is certainly worth. Both the definition of the lease and the lessee accounting reform process has the theoretical and practical meanings. But the reform of the lessor accounting has not reached the required depth and level. Secondly, after the reform of international lease accounting standards, the scope of the lease will be slightly narrowed, and the distinction between leasing and services will be more important. Thirdly, after the reform of international leases standard, the standard will produce the expected impact of the financial statements as following:the significant increase of asset-liability ratio, the sharp rise of financial expenses, and any significant changes of cash flow structure, which will have the expected impact of the lessee’s purchase and lease decisions. Fourthly, the single model are discussed to made comments on the reform of international norms leasing. Fifthly, our difficulties in convergence with International Lease standards are discussed. Accordingly, standard-setting bodies are recommended that to follow the "idea accepted, technically involved in, convergence prudently" overall strategy. Companies are advised to strengthen corporate accounting information system construction, and the legal department to speed up the introduction of leasing special laws, to prepare for the reform.