The Impact Of New Lease Standards On Enterprise And Countermeasures

In December 2018,The Ministry of Finance issued the CAS21(2018),which is convergent with IFRS 16.This new standard will be implemented on January 1,2019.unifying the accounting model for operating leases and financial leases.The lessee is required to confirm the right-of-use assets and lease liabilities for all leases except short-term leases and leases of low-value assets,and subsequently accrue depreciation expenses and interest expenses during the lease term.Its suppose is to effectively suppress off-balance sheet debt financing and restore the actual financial status of the enterprise.Based on the balance sheet view,the economic effect theory of accounting standards and the information asymmetry theory,It conducts case study.It firstly introduces the revised content of the CAS21(2018).Then it focuses on the impact of C AS21(2018)on the aviation industry and descriptive statistical analysis of the industry.It selects China Southern Airlines,which has the most affected financial indicators,the largest fleet and the highest proportion of operating leasing business in the industry,It conducts a case study,through comparative analysis of the data and information on the 2019 and 2018 annual report,combined with the practice situation after the implementation of the new lease standard,to study the beneficial and adverse effects of the new leasing standards on the company;finally,it proposes countermeasures to address the adverse effects of CAS21(2018).The research found that the capitalization of operating leases under the CAS21(2018)changes in lease-affected expense items and reduces operating costs;the impact of leases affect each period expenses has changed from the same to cost forward,which brings the benefits of delayed tax payment;it changes items presented in the cash flow statement,which shows a better cash flow situation.It brings the following six adverse effects:First,it increases the financial leverage ratio,which increases corporate financial risks;the second is to weaken ratios of profitability and aggravate performance fluctuations;third,it reduces the quality of accounting information and increase the difficulty of practical operations;fourth,it increases the interest rate risk and potential losses of rental payment;The fifth,is to deepen the impact of foreign currency leases,which magnifies exchange rate risks;sixth,operating leases lose accounting advantages.If companies reduce the proportion of operating leases,potential operating risks will increase.In response to the adverse effects,this research proposes countermeasures:First,the company need to improve the financing structure to reduce financial risks;the second is to optimize business strategies and smooth performance fluctuations;the third is to strengthen financial work and solve practical problems;the fourth is to make good use of hedging tools to deal with interest rate risks;the fifth is to use financial tools to mitigate exchange rate risks;sixth,it weighs the leasing methods to reduce operational risks.