A Study On The Financial Impact Of The New Leasing Criteria On China Express Airlines

The International Accounting Standards Board issued IFRS 16 Leases in 2016,which requires operating leases to be moved from off-balance sheet to on-balance sheet disclosure.In December 2018,the Ministry of Finance of China revised and issued the Accounting Standards for Business Enterprises No.21-Leases.The new standard proposes to combine the two lease methods of financial lease and operating lease into one,adopting a right-of-use asset model to measure the leased assets,and properly resolve the phenomenon of off-balance sheet financing that is not fully reflected in operating leases.It is expected that lease activities will More true and complete reflection in the report.On the other hand,the revision of the standard may increase the uncertainty of corporate value due to the valuation characteristics of operating lease asset use rights,or increase the company’s debt ratio and financing risk due to internalization of the operating lease debt statement.Businesses have varying degrees of financial impact.Therefore,this paper selects China Express Airlines.(hereinafter referred to as China Airlines)with broad prospects,large capital requirements,and difficult financing,and explores the expected impact of the revised code on China Express Airlines’ finances.On the one hand,companies can do it in advance Being well prepared for financial impacts,on the other hand,can stimulate the theoretical community’s attention to the revised standards and promote the improvement of lease accounting standards.The article begins with the background,literature review,and theoretical basis of lease accounting.First,the article compares the new and old standards in terms of the scope of lease identification and the application of the standard,the replacement of the dual model by the single lease accounting model,and the presentation and disclosure of the lease.Specific changes and their general impact on corporate finance;secondly,analyzing the operating characteristics and leasing status of the capacity-buying business model of China Express Airlines;and restate the financial statements under the new standard;and then analyzing the changes to the financial information,The financial impact of financing capacity and investment decisions.Finally,put forward feasible suggestions for China Airlines to cope with the above changes in financial impact.The study found that the amendments to the standards have enhanced the transparency of China Airlines’ accounting information,thereby improving the quality of its accounting information;thus improving the quality of accounting information Indicators of corporate solvency,operational capacity and profitability continue to weaken in the short term;The asset-liability ratio increased significantly,the financial leverage increased,and the capital structure deteriorated.Affected by changes in financial information,enterprises’ short-term debt financing costs increase,financing channels decrease,equity financing costs increase,and overall financing capacity decreases.Based on the changes in corporate financial information and the decline in financing capacity,China Express Airlines needs to change its investment decisions,slow down its expansion strategy and optimize its approach to aircraft introduction.Therefore,it is suggested that China Express Airlines can take the following measures to deal with the financial impact of the revised standards: predict the financial impact of the new standards on enterprises in advance,and strengthen communication with users of statements.Improve the proportion of equity financing optimize the financing structure,improve their own profitability increase internal financing,broaden the financing channels of enterprises.Improve the aircraft leasing mode,optimize the proportion of aircraft leasing and purchase,and control the process of enterprise expansion.