Analysis On The Effects Of The Application To IFRS16 By The Aviation Enterprise And Their Countermeasures

IASB formally issued IFRS 16 on January 13,2016,which changed the accounting treatment of tenants in leasing business.It required no longer to distinguish between financial lease and operating lease.Apart from short-term lease with a term of less than one year and small-scale lease with a value of less than $5000,other leasing businesses should record the corresponding "right-of-use assets" and "lease liabilities".This will increase the total assets and liabilities of the lessee at the same time,which will have a certain impact on the relevant financial ratios.At present,the asset-liability ratio of large airlines worldwide is usually more than 65%.In the past,many airlines chose to acquire aircraft by operating lease instead of purchasing or financing lease in order to control the asset-liability ratio.After operating lease assets are listed,this will no longer have the effect of controlling the ratio.Therefore,the reform of IFRS 16 will have a significant impact on the aviation industry.The core issue of this paper is what will affect the aviation companies after IFRS 16 implementation and how to deal with it.After the application of IFRS 16,how will the airline’s financial statements and key financial indicators change,and what impact will it have on the airline’s financing risk,management and risk control,and how will the airline avoid the impact of the changes in standards?On the contrary,can the reform of the new leasing standards really achieve the purpose of restricting the financing of off-balance sheet assets and restoring the true financial situation of enterprises?How will the reform of standards guide enterprises?What deficiencies still exist in the design of standards?What aspects should be paid attention to when our standards are in line with international trends?The findings of this study are as follows:(1)After applying the new leasing criteria,the main financial indicators of airlines with a large number of leasing assets deteriorate,which aggravates the risks faced by the companies;(2)China Eastern Airlines has taken a series of measures to adapt to the changes of the criteria,including comparative analysis of the leasing costs of different leasing modes after eliminating the off-balance-sheet financing effects,and more introduction of aircraft by means of financial Assets,instead of part of the original leasing business,and integrate the supply chain,change the financial strategy and management strategy;(3)The implementation of IFRS 16 can play a positive role in guiding the level of enterprise management,help companies to establish an independent and efficient leasing management structure,making the collection,analysis and application of leasing data more accurate and efficient.The research value and practical enlightenment of this paper:Based on a series of decision-making of Eastern Airlines after the promulgation of IFRS 16 and before its implementation,through quantitative and qualitative theoretical analysis,this paper identifies the effect of its decision-making implementation and whether it really meets the impact of changes in standards,and provides solutions for aviation companies in response to changes in standards,so as to achieve a smooth transition.In terms of the reform of accounting standards,this paper explores how the reform of quasi-inquiry standards will guide enterprises,analyses the application prospects of the new standards,and puts forward reasonable suggestions for the international convergence of accounting standards in China.