Study On The Financial Impact Of Revised CAS21 On Retail Enterprises

The leasing criterion used in China is based on the risk-reward model,which divides the leasing business into two modes,namely operating leasing and financing leasing.Under the operating lease model,the leased assets do not need to be included in the balance sheet,so this kind of leasing business is often used as a means to whitewash statements,showing the characteristics of off-balance sheet disclosure;Financial leasing,on the other hand,includes leasing assets into the balance sheet according to the accounting principle of substance over form.According to the data,according to IAS17 as the standard for the division of leasing business,there are about 290 million us dollars of leasing business in the world with operating leasing situation floating off the balance sheet.In the context of the vigorous development of the global leasing industry,the current leasing accounting standards have exposed many drawbacks,and the existing problems have become increasingly prominent.On January 1,2019,the international accounting standards board published on January 13,2016 "international accounting standards no.16-lease" officially published.Since China issued the new accounting standards for enterprises in 2006,it has maintained the convergence with IFRS.The promulgation of IFRS16 has also become a powerful driving force for the revision of China's leasing standards.After the release of IFRS16,the ministry of finance of China also launched the project of leasing standards revision,and released the revised draft of leasing standards(CAS21)for public comment in January 2018,and finally officially released the new standards of CAS21 in December 2018.A comparison of CAS21 and IFRS16 shows that the two are roughly the same.The new rule of CAS21 further improves the definition of assets,clarifies that assets have the right to use,so the assets of operating leases should be capitalized into the balance sheet.Retail enterprises generally follow the asset light strategy,most of its operating facilities are achieved by operating lease business,such as supermarkets,stores,convenience stores and warehouse,etc.,operating lease assets scale,high proportion of total assets,revised and subsequent implementation of lease criterion is bound to such enterprises to bring huge influence.In this paper,China resources vanguard,a retail enterprise,is selected as the case study object to analyze the financial impact of the new rule of CAS21 on retail enterprises.The case analysis part will analyze the accounting treatment,data of financial statements and changes of important financial indicators of CR vanguard's leasing business under the new and old standards.In terms of financial indicators,quantitative analysis is mainly made from the aspects of capital structure,debt paying ability,profitability,operating efficiency and expense management level.It can be found that many financial indicators have undergone adverse changes after the application of the new rule of CAS21,which has worsened the current operating situation.It is also a big challenge for the lessee.Finally,the thesis analysis of the enterprise from the perspective of retail enterprises,will be how to adjust the lease even business decisions to deal with the implementation of the new guidelines,combined with the situation of retail enterprises,put forward from the aspects of strategic importance to standard effect,path in terms of the new criterion of lower lease liability,business decisions change rent to buy,shorten the lease term,set up a subsidiary engaged in leasing business alone.In the hope of providing enlightenment to the retail enterprises on how to better deal with the implementation of leasing standards.