Research On The Impact Of New International Leasing Accounting Standards On Retail Industry

As an important means of financing,the leasing business has developed rapidly in recent years and plays an important role in modern society's economic activities.According to the current leasing accounting standards,the leasing business is diversified into two types: operating leases and financing leases,and adopt different accounting methods.Financing leases require the recognition of corresponding assets and liabilities in the balance sheet,while operating leases not.This treatment leads to the issue of off balance sheet financing for operating leases,which has brought a lot of controversy.On January 13,2016,the International Accounting Standards Board promulgated new international leasing accounting standards.In the new standards,the lessee is no longer required to distinguish between operating leases and financing leases.This change will cause a huge impact on relevant industries.Due to its own characteristics,retail industry obtains most of its daily business premises through operating leases.After the implementation of the new standards,a large number of operating lease-related assets and liabilities will be included in the presentation scope,which will bring huge changes to the financial statements of retail enterprises,and affect the future business operating as well as development of the companies.How to deal with the impact brought about by the new standards is essential for retail industry.This paper adopts the case study method,taking the retail enterprise Company H as an example.By adjusting its financial statements in accordance with the new international leasing accounting standards and comparing the financial data before and after the adjustment,quantitative analysis can be made for the changes in financial statements and financial indicators of the enterprise which is brought by the standards' change.And the changes will also be qualitatively analyzed for other aspects.The analysis result shows that the new leasing accounting standards will cause that the retail enterprise's profitability decline in short-term,scale of debts expand,leverage level increase,and financial indicators deteriorate,which may lead to increased difficulty in financing and higher financing costs.In addition,extra work and management costs may also be caused.Finally,according to the characteristics of the retail industry and the result of the case analysis,corresponding countermeasures and suggestions are proposed.