Financial Impact Of New Lease Accounting Standards On China’s Airlines

As one of the main ways of corporate financing,the importance of leasing is increasing day by day.The IASB issued "International Financial Reporting Standards No.16-Leases"(IFRS16 for short)five years ago,and the regulations came into effect in 2019.This change has brought substantial changes to the company’s leasing business.For example,operating leases and financial leases are recorded together in the books of accounts,and all are reflected in the financial statements.At the end of 2018,the Ministry of Finance also issued the new China Accounting No.21 Lease Standards.Under the general trend that the overall accounting standards are in line with the international accounting standards,the changes in the lease accounting standards will have a huge impact on my country’s aviation,construction and other industries as a whole.This paper conducts research from two aspects of theory and case.In theory,this paper mainly through the research status at home and abroad,expounds the research on the financial impact of lease accounting standard revision.In addition,it combs the related concepts of leasing,and interprets the main contents of the newly revised CAS21.As the aviation industry is one of the important players in the leasing market,the main way for my country’s civil aviation companies to introduce aircraft is through the corresponding leasing business.China Southern Airlines has strong competitiveness in the aviation industry.Therefore,this article takes China Southern Airlines as the case analysis object to analyze the changes that the implementation of the new lease accounting standards will bring to the company,including making corresponding adjustments to corporate financial data,analyzing changes in corporate financial indicators,and in-depth research on China Southern Airlines.The substantive impact of business development and reasonable suggestions are made to prepare companies for the new lease accounting standards and help companies discover and avoid risks in a timely manner.The study found that: the revision of CAS21 is helpful to users of financial reports,but for airlines,it will expose their financial risks.With the deterioration of financial indicators and the impact of profits at the initial stage of the implementation of the standards,aviation companies such as China Southern Airlines need to actively take countermeasures to alleviate the non-ignorable financial impact of the new leasing standards on their products.Through research,the recommendations are as follows:Aviation companies should first strengthen the construction of the accounting system and communicate with stakeholders in advance;secondly,improve the existing financing methods to increase the proportion of self-purchasing aircraft,and rationally arrange the fleet structure;again,it can innovate the leasing model,For example,the use of exemption clauses in the contract and the establishment of exclusive lease subsidiaries;finally,the disclosure of lease content should be strengthened in accordance with the requirements of CAS21.