Research On The Impact Of New Lease Standards On Financial Performance Of Aviation Enterprises

On December 7,2018,China's Ministry of Finance officially released the revised "Enterprise Accounting Standards No.21-Lease",which means that China's leasing standards are formally aligned with the international leasing standard IFRS16.The new lease criteria to cancel the changes in the operating lease classification will have a relatively large impact on the financial situation of the enterprise.Since the new standard is only implemented on January 1,2021 for companies listed only in China,before this,It is of great significance to discuss the expected impact of the new standards on Chinese companies.This paper selects Spring Airlines from the operating lease model to conduct case analysis to illustrate the expected impact of the new standard on Spring Airlines.First of all,this paper starts with the background of the release of China's new leasing criteria,expounds the development process of the leasing criteria,and expounds the main content of the new standard revision and compares it with the old standard and IFRS16.Secondly,it introduces the case of Spring Airlines,analyzes the development of aircraft leasing and the situation of the Spring Airlines rental aircraft and the main business.Then,the case analysis is carried out to explain the impact of the new standard on Spring Airlines through the differences in the accounting treatment of the new and old standards,the changes in the three major reports under the new standard,the changes in financial performance and the impact of the new standards on risk management.Finally,give some advice on how Spring Airlines can respond to the new guidelines.This paper finds that due to the new criteria for the abolition of the classification of operating leases,a large number of operating lease aircraft of Spring Airlines will be converted into financial leases,generating right-of-use assets and lease liabilities,which will increase the assets and liabilities of Spring Airlines at the same time,resulting in an increase in asset-liability ratio.,affecting its solvency and increasing its financing risk;at the same time,due to the large amount of interest expenses,resulting in a decrease in net profit,this will reduce its profitability without considering the depreciation expense,but if it is to reveal the asset depreciation Amortization of these non-cash costs with intangible assets,using the EBITDA margin,the new standard has a positive effect on its profitability,and through accounting comparison,this article finds the interest expense to profit generated under the new standard.The impact of the table will gradually weaken.