A Case Study On The Implementation Of New Lease Standard By China Southern Airlines

The new international leasing standard IFRS 16 was issued in January 2016,and Ministry of Finance of People Republic of China officially revised and issued the Accounting Standard for Business Enterprises No.21 – Leasing(Revised).The two new leasing standards were implemented simultaneously on January 1,2019.What is the expected progress and impact of the leasing reform?In this paper,China Southern Airlines Group Co.,Ltd.(hereinafter referred to as "China Southern Airlines" or "China Southern Airlines")is selected as the case study object.It mainly collects the financial statement data disclosed by China Southern Airlines,analyzes the adjustment of financial statements and financial indicators caused by the accounting treatment of leasing capitalization,and then studies the impact of leasing capitalization on enterprises,and the impact of financial situation,as well as the countermeasures and effectiveness of enterprises in the face of challenges.The research shows that the implementation of the new leasing standards in China has eliminated the defects of the original standards and the disadvantages brought by off balance sheet liabilities,effectively corrected the financial statements and financial indicators of enterprises,better restored the true financial situation of enterprises and disclosed it,and then demonstrated an open and transparent enterprise.The new standard not only guides enterprises to revise financial statements and indicators,but also exposes the hidden debts and risks of enterprises,which brings great pressure and challenges to enterprises,and promotes enterprises to innovate and improve themselves.China Southern Airlines seized the favorable opportunity to timely implement the equity diversification reform,targeted to expand the equity financing channels,and simultaneously took multiple measures including controlling the speed and scale of aircraft import,which not only maintained the relative stability of the enterprise’s asset liability ratio and debt paying ability,but also met the market demand of air transportation and fleet expansion.China Southern Airlines also strives to improve its internal governance and financial management system,integrate leasing resources,create a fair market competition environment,improve the level of internationalization and standardization,promote enterprises to reduce leasing costs and risks,and improve its financial situation,so as to promote the high-quality development of China Southern Airlines.This paper systematically analyzes the countermeasures and effectiveness of China Southern Airlines in the face of challenges,and puts forward countermeasures and suggestions,which can be used for reference and inspiration for aviation enterprises and is of great significance for China to continue to implement the new leasing standards and realize the smooth transition.