The Influence Of New Revenue Standards On Real Estate Enterprises

Revenue is an important indicator reflecting the business results of an enterprise,and it has an important impact on the financial management and continuous operation of an enterprise.However,in the course of business operations,the variety of businesses makes it difficult to reasonably recognize and measure income.In keeping with international standards,China revised and issued the Accounting Standards for Business Enterprises No.14-Revenue(CAS14(2017))in 2017,and systematically revised the requirements for revenue recognition,measurement,and disclosure.Real estate companies are affected by CAS14(2017)due to product specificity and sales complexity.Therefore,there is an urgent need to deeply analyze the impact and degree of CAS14(2017)on real estate companies,so as to provide a scientific reference for the sustainable development of real estate companies and the promotion of the guidelines.This article compares and analyzes the changes in revenue recognition and measurement of the new and old income standards based on the literature review of income recognition,changes in income standards,and the impact of new income standards,combined with the data of A-share real estate companies that have implemented CAS14(2017).As a typical case,Xincheng Holdings will deeply analyze the impact of CAS14(2017)on its income measurement,financial statements,corporate management,and capital market response,etc.,and provide practical inspiration for its related impact.The research results show that the main impact of CAS14(2017)on Xincheng Holdings is mainly reflected in:(1)Revenue recognition and measurement adjustment.The enterprise does not adopt the time slot method to confirm sales revenue,but it is unified at the time of revenue recognition,that is,revenue is recognized at the time of transfer of control,and the contract acquisition cost and major financing components are capitalized;(2)Changes in financial statements.The addition of "contract liability" presentation in the balance sheet has reduced the company’s asset-liability ratio,and to a certain extent,increased the net profit through the capitalization of sales expenses,and there is a problem of incomplete disclosure of notes;(3)improved management.Through the adjustment of income measurement,enterprises increase operating income and net profit to achieve surplus management,and put forward higher requirements on their contract management level;(4)Capital market fluctuations.After the first disclosure of the implementation of CAS14(2017),the cumulative excess return of the capital market increased,showing a positive effect,but when its implementation of irregular behavior disclosure,the capital market showed a negative effect.Based on this,it is proposed that real estate companies should pay attention to whether the economic substance has changed,whether the capitalization of contract acquisition costs is reasonable,and to strengthen the disclosure of financial statements in the implementation of CAS14(2017),which provides a reference for enhancing the financial management and sustainable operation capabilities of the company.