Research On Improvement Of Accounting Treatment Of Finance Lease From The Perspective Of Lessor

Since 1980 s,financial leasing industry accounts for a bigger and bigger ratio in China's economy life.With the rapid development of the financial leasing industry,the China Accounting Standards 21(2006)has been unable to accurately reflect the nature of the transaction of the leasing business,and the accounting problems of financial leasing business also become more and more serious.Aiming at the problems of direct lease business and leaseback business in the CAS 21(2006),this article starts from the lessor's point of view,and launches the discussion through the following five aspects by adopting the normative research method and combing with IFRS 16 and the documents which is related to financial leasing business.Firstly,this article collates domestic and foreign scholars' academic researches about financial leases.Secondly,the related theories of financial leases are analyzed,including the MM theory,the tax differential theory and the four pillars theory.These theories constitute the theoretical basis of the rapid development of financial leasing business.Thirdly,the present situation of financial leases in China is analyzed.It also points out the problems existing in the accounting treatment of financial leases in China,which includes that the accounting recognition of the guaranteed residual value is unreasonable,the accounting treatment of contingent rent dose not conform to the essence of itself,the accounting treatment of the sale and leaseback which results in a financial lease dose not accord with the essence of financing,and in the case that the sale and leaseback which results in financial leases is treated as a mortgage,the way of the financing income is recognized dose not correspond to the way in which the interest is charged on the mortgage.Fourthly,based on the actual situation,this article puts forward some suggestions on the accounting treatment of financial leases,which includes that “anticipated revenue related to the residual value of the leasing asset” should be charged to the lease payments,and the changes of financial income according to the relationship between the fair value of the leased assets and the guaranteed residual value at the end of the lease term should be treated in accordance with the change of accounting estimate;contingent rents should be included in lease payments and should participate in the recognition of unearned finance income and the calculation of the interest rate implicit in the lease,and the changes in rental types due to contingent rentschange should be treated in accordance with the change of accounting policy;sale and leaseback which results in financial leases should be canceled the accounting treatment for the purchase of leased assets and be treated in accordance with financial assets;as for sale and leaseback which results in financial leases and considered as a mortgage,it is important to calculate the internal interest rate and external interest rate.This article carries on the improvement research to the finance lease business accounting treatment,which can conductive to the further improvement of the theoretical basis of the accounting system of China,and can make the financial leases accounting treatment more standard.