The Financial Effect And Analysis Of The Application Of New Lease Standards By Airlines

While the global air transportation industry continues to develop,my country’s air transportation industry is also in a steadily rising stage.In early December 2018,with the promulgation of the "Accounting Standards for Business Enterprises No.21-Leases",domestic accounting standards gradually converged to IFRS.In response to the revision of the new standards,Pricewaterhouse Coopers has conducted surveys in different industries and learned that the cancellation of the lease classification of lessees under the new CAS21 has had varying degrees of impact on enterprises,especially for the aviation industry and retail.The industry has a greater impact.In my country’s major airlines,a large number of aircraft acquired through leasing,so whether this high-value leased aircraft assets have significant changes to the airline’s financial statements and financial indicators,and cause risks.The article selects China Southern Airlines as an object to explore the financial effects of China Southern Airlines which has applied the new CAS21.It proposes countermeasures to deal with changes in financial statements and operating risks caused by deterioration of financial indicators.The first part,the introduction,mainly explained the background and significance of the research,and illustrate the research ideas and research framework of this article from the background of the steady development of my country’s aircraft leasing market and the revision of the new CAS21.The second part introduced the evolution of IFRS,and compare with the results of the researches about IFRS16 from domestic and foreign scholars including the positive attitudes towards the "right-to-use asset" model.Comparing the old and new leasing standards,and summarizing their research conclusions,provides a strong basis for the analysis of the objects studied in this article.The third part based on lease accounting theory,focusing on comparing the advantages and disadvantages of the new and old domestic lease standards,and exploring a future development direction of the new lease standards.The fourth part is to start from the global leasing market,it introduced the extent of the impact of the new CAS21 for different industries,briefly clarify the importance of the aircraft leasing market in the development of my country.In addition,focus on the financial effects of the major airlines in the air transport industry following the use of the new CAS21.General narrative.The fifth part takes China Southern Airlines as the research object,and focuses on financial statements and financial indicators.This article learns that the new standards have brought a certain degree of change to both.As far as the balance sheet is concerned,the addition of new accounts has increased the corresponding book value of non-current assets and non-current liabilities in the company’s statements,which cause the asset-liability ratio and equity ratio to rise and weakening the long-term debt repayment ability.As for the statement of income and expense Expenses have also increased due to the emergence of right-of-use assets and lease liabilities,depreciation expenses and interest expenses will increase the burden of expenses,and with the decline in rents,interest will also fall.The company’s income may show a low and high this phenomenon has weakened the operating capacity for a certain period,leading the rate of return on total assets and the rate of return on net assets to decrease.In the statement of cash flow,the cash structure of financing activities and the cash structure of operating activities would change.Originally,according to the requirements of the old standard,the rent of cash outflows from operating activities should be included in the cash outflows of financing activities.The new leasing standards have brought changes to corporate financial indicators and financial statements,but also exposed problems such as financing difficulties and it’s essential to improve the quality of accounting information.The sixth part is based on the analysis made in the previous article and brings forward the prevention and effective measures for financial operation risks,including reasonable preparation of the fleet size,broadening of financing channels,effective response to interest rate and exchange rate fluctuations,and strengthening of financial personnel training.The innovation and contribution of this article: First,the timeliness is strong.Since most domestic airlines that only listed on the domestic market will officially continue to use it in 2021,this article will provide certain reference value for airlines to respond to the new CAS21;second,Innovative research ideas.Most of the previous studies have made predictions based on the assumptions of the company’s financial statements in previous years,and the authenticity of the data has yet to verify.And this article uses the exact information after retrospective adjustment in China Southern Airlines’ financial statements to analyze;third,the risk prevention is more targeted,this article refers to the relevant content of the latest standards to explain,and analyzes the possibility of financial effects based on airlines Some business problems caused by the same time put forward constructive opinionsHowever,due to the author’s limited knowledge of the problem and limited space for writing,there are still some shortcomings in the research results.First,the research object of this article is relatively single;second,it is difficult to obtain cases for in-depth and detailed research in the air transport industry.Internal relevant information;third,the time for airlines to apply the new standards is relatively short,and the trend of influence is not significant enough.