Analysis Of The Financial Impact Of The New Revenue Standards On The Automobile Manufacturing Industry

With the rising capacity of our national economy,automobiles have gradually become the pillar industry of the national economy and have a non-negligible impact on the national economy.At the same time,the transaction business of enterprises has become increasingly complex and diverse,and the original revenue standard can hardly cope with today’s business model.In order to adapt to the current revenue recognition situation,China’s Ministry of Finance revised and issued CAS 14 in July 2017,aiming at convergence with international standards.The promulgation of the new revenue standard has undoubtedly brought opportunities and challenges to the capital market.This paper takes the automobile manufacturing industry as the starting point and examines the impact of the new revenue standard on the timing of revenue recognition,multiple performance obligations,sales commission and distribution subsidies given to dealers,and car loan subsidies from the business characteristics of automobile manufacturing enterprises.Through the case study of SAIC,this paper finds that the new revenue standard causes changes in balance sheet accounts and presentation amounts,increases contract assets,contract liabilities,contract acquisition costs and contract performance costs,and decreases operating revenues and operating costs to varying degrees,as well as decreases in selling expenses and finance costs with the adjustment of car loan discount and cash discount.and the decrease of its financial indicators compared with the old ones.The financial indicators also have some negative changes compared with the old income standard,and the profitability and asset turnover of the enterprise have been reduced to some extent.Based on these negative effects,enterprises should improve the professional judgment of accounting personnel to adapt to the increasingly complex business model;improve the financial system to improve the timely and accurate synchronized update of information;refine the dealership contracts to avoid adverse effects for enterprises;government regulators should also improve the relevant regulations and policies on information disclosure to enhance the horizontal comparability of information disclosure.