Analysis Of The Impact Of New Lease Standards On Retail Enterprise In China

In 2016,IASB and FASB issued IFRS16,and then the China’s Ministry of Finance issued the revised CAS21 in 2018.The main purpose of this paper is to study the impact of the new lease standards on the retail industry from the industry level and Wangfujing company level.There are two modes of leasing to choose in old lease standards,one is operating lease,the other is finance lease.The accounting treatment methods of the two modes are quite different.Because operating lease is not included in the financial statement,many off balance sheet financing occur.With the continuous expansion of leasing business and the higher social attention to fraud,the old lease standards have failed to meet the requirements of information disclosure.In addition to convergence with international standards,China’s Ministry of Finance issued the new lease standards on December 7,2018,requiring companies that listed at both domestic and foreign to start implementation on January 1,2019,and other companies to implemented on January 1,2021.The core change of the new lease standard is "combined two leasing models to one",which requires that all leases except exemption items need to be confirmed in the financial statement,which will have a great impact on related enterprises.The retail industry companies usually have light assets,so most of its business places are obtained by operating lease.Because the high proportion of operating lease assets in total assets,the retail industry will be greatly affected by the revision of leasing standards.This paper first interprets the content of the new lease standards,and then studies the theoretical impact of the new criteria in the retail industry,and then applies the above theoretical analysis to the case study of Wangfujing company.Through the analysis of the full text,we can find that the implementation of the new standards requires higher information disclosure of enterprises,but at the same time,from the perspective of statements,the implementation of the new standards also produces negative effects such as deterioration of the business situation of enterprises,reduction of corporate solvency and so on.For the retail enterprises that are greatly affected,we should take necessary measures to deal with the new standards by reducing the adverse effect arise from implementing new lease standerds.This paper studies the content of the new standards,analyzes its impact on the retail industry,and takes Wangfujing as an example,specifically studies the impact of the new standards in the implementation process of enterprises,and finally puts forward relevant suggestions,which has a certain application value.