Studies On The Expected Impact CAS21(2018)on The Retail Enterprises’ Financial Statements

With the continuous development of China’s economy,leasing business occupies an increasing proportion in all walks of life.After the outbreak of financial fraud such as Enron in the United States,enterprises began to conduct off-balance sheet financing through operating leases and cover up the real financial situation.The drawbacks in IAS17--leasing have been criticized by many scholars.IASB and FASB have discussed and issued the Exposed draft--Leasing for many times,and released IFRS16--leasing in January 2016.In recent years,China’s leasing industry is booming,and off-balance sheet financing in leasing business is becoming more and more serious.The ministry of finance in our country constantly revising formula content,revised CAS21(2018)for enterprises.The criterion with IFRS16--lease distinguish operating lease and finance lease.Except the short-term lease and low value items,all leases businesses should use the right of use model in the balance sheet to confirm asset and lease liability.The introduction of CAS21(2018)will certainly bring some impact to the large leasing business enterprises in China.Therefore,we need to analyze the impact of the standards and put forward effective countermeasures and suggestions for enterprises to cope with the changes of the standards.This paper sorts out the development process of international leasing standards and China’s leasing standards.Meanwhile,analyzes the reasons for the revision of the new standards and compares the differences between the old and new standards in China.Choose ten companies which have lots of leasing business as the object of case study,comparing the differences between old and new standards for the change to financial statements and financial indicators,analyzing the impact of new standard on the retail enterprises and coming up with suggestions for enterprises.It is found that the CAS21(2018)have certain influence on the financial statements and financial indicators of retail enterprises.(1)For the balance sheet,the increase of the right to use assets and leasing liabilities causes the non-current assets and non-current liabilities of the enterprise to rise sharply,among which the increase of leasing liabilities is greater than the right to use assets.The enterprise’s solvency decreases,and the proportion of its own capital decreases.(2)For the income statement,the decrease of leasing interest with the decrease of rent leads to the trend of lower operating profit before and higher operating profit after.The rate of return on total assets,the rate of return on net assets and the operating profit margin decreased,and the profitability of enterprises decreased.(3)For the cash flow statement,the overall net cash flow is not affected.Total asset turnover rate drops,the business operation ability drops.As for the impact of the CAS21(2018)on the financial indicators of enterprises,this paper puts forward several countermeasures for enterprises from the aspects of improving the internal control system,planning the lease business,strengthening communication,in the hope of helping enterprises to make a smooth transition to CAS21(2018).