Effect Of Leasing Business On Asset-liability Ratio To The Lessee And The Sensitivity Analysis Under China's New Lease Standards

The global leasing industry is in the stage of continuous growth.With the outbreak of the Enron Incident,the original off-balance-sheet financing of leasing standards could not truly reflect the financial situation of enterprises,and other drawbacks were highlighted.In order to eliminate the doubts of users of financial statements,the international accounting standards board officially issued the new international leasing standards on January 13th,2016,and formally implemented them on January 1 st,2019.In line with the principle of convergence with international accounting standards,on December 7th,2018,the ministry of finance of the Peopled Republic of China issued the notice on the revision and issuance of accounting standards for enterprises "No.21-lease(amendment)",which represents the beginning of the formal use of the new lease standards in China.As Chinese total leasing business is only second to that of the United States,the implementation of the new leasing standards will have a significant impact on Chinese enterprises.In the previous studies on leasing standards,scholars at home and abroad mostly studied on the basis of the revision of international leasing accounting standards,the new international leasing standards issued in 2016 and the draft for soliciting opinions on Chinese new leasing standards.The research questions focused on the analysis and summary of the advantages and disadvantages of the new and old standards,the opinions and suggestions on the standard making institutions,and the adverse effects of the new standards on enterprises and the countermeasures of enterprises,etc.There is little research focusing on the impact of Chinese new leasing standards on the asset-liability ratio of enterprises from the perspective of accounting elements.Due to the short time for the promulgation of new lease standards in China,there are few studies on the new lease standards in China.In order to supplement this field,the research question in this paper is that what is the difference between the old and new lease standards in the accounting treatment of operating lease?How do these differences affect asset-liability ratios?What is the sensitive extent of the leasing business to the factors affecting the asset-liability ratio under the new leasing standards?This paper is based on the accounting equation,the right to use assets,and the economic consequences of accounting standards,compares the old and the new lease accounting standard in China,analyses the differences of accounting treatments from the aspect of accounting standards,builds the asset-liability ratio model of the lessee,and carries out sensitivity analysis of single factor and multi-factors.The conclusions of this paper are:(1)The new leasing standards will not affect substantially the asset-liability ratio rate of enterprises,only will be more close to the asset-liability ratio during the ending of leasing periods,which could improve the quality of financial information.(2)The asset-liability ratio rate of heavy asset industry is greatly affected under the new leasing standards;(3)After the new leasing standards were implemented,in the case of other factors determined,the lower the initial asset-liability ratio of the enterprise,the larger the scale of leasing business of the enterprise,the smaller the lease discount rate,the lower the applicable income tax rate of the enterprise,the greater the impact on the asset-liability ratio of the enterprise.In combination with the industry situation in China,the new leasing standards have a greater impact on industries with high leasing demand and high value of leasehold.Application enlightenment of this paper:Through the analysis of lessee operating leasing business which has the greatest impact on the implementation of the new leasing standards,Chinese enterprises can more clearly understand the impact of the change of leasing standards on enterprises.A clear understanding of the impact process of leasing business on asset-liability ratio and the sensitivity of the influencing factors under the new leasing standards is of reference significance for enterprises to cope with the change of leasing standards and carry out leasing business negotiations in the future.