Research On The Expected Financial Impact Of New CAS 21 On Juneyao Airlines

At present,China’s major airlines mainly use leasing for fleet introduction.In December 2018,China’s Ministry of Finance issued a new leasing standard,which requires all domestic enterprises to implement it in January 2021.The biggest change of the new standard is the accounting treatment of operating lease by the lessee.Some scholars have studied the expected impact of the implementation of the new standards on airlines and the corresponding measures.However,most of the current studies are aimed at large state-owned airlines,and few studies on the impact of the change of the new standards on smaller private airlines.However,the change of leasing standards may have a greater impact on private airlines.On the one hand,private airlines’ operating leasing business accounts for a relatively high proportion.On the other hand,some scholars find that the new standards will worsen the financial indicators including solvency.Therefore,private airlines with narrow financing channels and mainly relying on bank loans may be affected by the change of standards in financing more.Therefore,this paper chooses Juneyao Airlines,a private airline with a high proportion of operating lease,as the research object,specifically analyzes the financial impact of the new lease standards on it,and gives suggestions to deal with the changes of the standards.In this paper,the first chapter describes the research background and significance,sorts out the domestic and foreign scholars’ research on the lease criteria,and introduces the research content and methods of this paper;the second chapter introduces the theoretical basis of this paper and the changes of the new lease criteria;the third chapter describes and analyzes the current situation of aviation industry leasing and the financing and leasing situation of Juneyao Airlines.The first section of the fourth chapter compares the presentation and disclosure of Juneyao Airlines’ financial statements in 2019 under the new and old standards;the second section analyzes the impact of the new standards on the financial information of Juneyao Airlines,including the quality of accounting information and financial performance indicators;the third section uses the Z-value analysis method to analyze the impact of changes in standards on the financial risk of Juneyao airlines,and also uses the data to analyze the impact of exchange rate risk and interest rate risk of Juneyao Airlines;the fourth section analyzes the influence of the change of accounting standards on Juneyao Airlines’ financial decision-making from two aspects: the choice of discount rate and the way of aircraft introduction.In the fifth chapter,some suggestions are given to deal with the new standard.This paper draws the following conclusions: the expected financial impact of the implementation of the new leasing standards on Juneyao Airlines is as follows:(1)assets and liabilities expand,the profit in the early stage of leasing will be significantly reduced,and the structure of cash flow will change;(2)the quality of accounting information will improve,but the indicators of solvency,profitability and operating capacity will be weakened;(3)the bankruptcy risk measured by Z value will increase,and the interest rate risk and exchange rate risk will also increase;(4)Juneyao airlines will pay more attention to the choice of discount rate in order to achieve its financial objectives,and its preference for leasing mode may change,and it may consider the cash cost more to choose the leasing mode.In this paper,the detailed analysis of the impact of the new leasing standards on the private airline —— Juneyao airlines and the countermeasures are given.On the one hand,it can make the users of financial statements more clearly understand the expected financial impact of the new standards on the private airlines.On the other hand,it also has certain guiding significance for Juneyao airlines and other private airlines to deal with the new standards.