The Study On The Consequence Of The Reform Of International Leasing Accounting Standard

The International Accounting Standards Board(IASB)issued International Financial Reporting Standards No.16-Lease(hereinafter referred to as "IFRS16")on January 13,2016,which will come into effect on January 1,2019.The new standard cancels the classification of operating lease and financing lease.All leasing businesses need to reflect the related assets and liabilities in the financial report,which completely changes the previous accounting confirmation mode of leasing business.Based on the principle of convergence with international accounting standards,on December 13,2018,the Ministry of Finance of China also issued a revision of Accounting Standards for Enterprises No.21-Leasing.The revised new standards will be fully implemented on January 1,2021.Based on the theory of economic consequences,this paper uses normative research and case study to explore the impact of the new accounting standards on international leasing.On the basis of sorting out the specific specifications of the new leasing accounting standards,taking Southern Airlines,which adopts a large number of operating leasing business as an example,this paper restates the real data of Southern Airlines based on the contents of the new standards,and analyses the financial impact of the new standards on Southern Airlines,as well as the changes in the company’s behavior in response to the changes in the standards,and synthesizes them from the perspective of expected effects and unexpected effects.To measure the impact of the new leasing accounting standards on Southern Airlines.Through the case analysis of Southern Airlines,it is found that after the application of the new international leasing accounting standards,due to the change of accounting confirmation mode and the influence of exchange rate fluctuation,the leasing cost will be larger than the rental cost,which is expected to lead to a sharp increase in assets and liabilities of Southern Airlines,a decline in total profits,and deterioration of performance indicators related to assets,liabilities and profitability.Considering the long-term continuous operating lease for operational purposes,in order to avoid the adverse effects brought by the change of leasing accounting standard,Southern Airlines confirmed in advance the after-sale and rent-back transactions in favor of itself under the old accounting leasing standard during the transition period,and proceeded to establish affiliated companies with innovative aviation financial model to change the transaction structure of the original leasing business and transfer the exchange risk,with the purpose of reducing the leasing cost and controlling the scale of liabilities.In the future,the proportion of aircraft introduced from the company is expected to expand and the related amount will increase year by year,which will have a greater impact on the future financial situation and operating performance of China Southern Airlines.It is expected to arouse the information opacity and the risk of interrelated deal.This paper draws the following conclusions with the example of Southern Airlines: the reform of leasing accounting standards prevents enterprises from using leasing classification to adopt different accounting methods to achieve specific accounting results,and improves the quality of accounting information in leasing business.However,for enterprises that have long-term business leasing business,the operating leasing cost tend to be higher than the rental cost,which leads to the deterioration of their financial situation and operating performance.It can be predicted that after the implementation of the new standards in China,these enterprises will take actions to avoid the impact of the changes in the standards just like Southern Airlines.While the reform of leasing accounting standards does good to the the quality of leasing information,it seems to exert negative unexpected effects of the quality of other accounting information with regard to other accounting standards.By analyzing the impact of the reform of international leasing accounting standards on China Southern Airlines,this paper aims to provide a useful reference for the regulators in China to face the expected behavioral responses of enterprises after the revision of China’s leasing accounting standards.The impact of the reform of the leasing accounting standard should be measured from both the expected and unexpected effects comprehensively.More importantly,the regulator should focus on the related negative unexpected effects and take effective measures to prevent non-standard situations,and build a better accounting standards system.