Research On The Impact Of The New Lease Standard On Corporate Earnings Management Motivation

The leasing standard has undergone a series of reforms due to the exposed disadvantages with the increasing importance of leasing in business management.The IFRS16 was released in January 2016 and officially implemented on January,2019.To converge with International Financial Reporting Standards,the Ministry of Finance of China revised and issued the Accounting Standards for Business Enterprises No.21-Leases on December 7,2018.As the "barometer" of international trade,the shipping industry is facing severe challenges in recent years.For a long time,shipping companies have a large number of leased assets in order to meet the needs of their own business development.Therefore,the reform of the leasing standards will have a significant impact on the shipping industry.The new leasing standard eliminates the lessee's classification of operating leases and financial leases.Operating leases,as an important form of off-balance sheet financing for many companies,have become one of the ways for companies to conduct earnings management.And the accounting standard has a long-term dynamic relationship with the earnings management.However,there is little research on the relationship between the new lease standards and earnings management.In this research,we sort out the main changes in the new leasing standard and then take COSCO as a case to study the impact path of the new leasing standard on corporate earnings management motivation.First,we explore the direct impact of the new standard on the company through statement restatement.Further the ILW model and the relevant financial data are used to analyze the impact of the new standard on the company's financial indicators.Secondly,based on the actual actions of the company studied,we analyze the indirect impact of the new standard on the company's financing strategy.Finally,based on the influencing factors of earnings management motivation,we analyze the impact path of the new standard on earnings management motivation from the internal and external perspectives.We further evaluate the effect of the new standard,and provide rational suggestions on the response to the new standard for companies and the further improvement of the standard for the standard makers.The study found that the new leasing standards have a positive impact on the motivation of corporate earnings management.On the one hand,the new standard has resulted in substantial changes in the accounting treatment of leases and eliminate the external opportunity for enterprises to use operating leases for earnings management.On the other hand,the new standard has a direct impact on the financial status of the company.By affecting the financing strategy of COSCO,the new standard suppress the internal motivation of earnings management.In addition,both companies and standard makers should actively respond to the impact of standard reforms in order to further improve the standards and promote the long-term development of the industry.