The Influence Of New Leasing Standards On Financial Statement And Behavior Decision Analysis Of China Eastern Airlines

The Ministry of Finance issued a new leasing standard in December 2018,requiring some enterprises to implement the new standard first in early 2019,while others will fully implement it two years later;it is urgent to solidly study the impact of the new standard on implementing enterprises and provide lessons learned for those implementing the new standard in 2021.Therefore,this paper uses Eastern Airlines as a case study to explore the impact of the new standard on financial reporting and,on this basis,to develop a behavioural decision analysis of stakeholders.Based on the information in the 2018-2019 annual report of Eastern Airlines,this paper has come to the following conclusions through the analysis of the impact of the new leasing standard on the financial statements:(1)the implementation of the new standard will make Eastern Airlines’ assets and liabilities increase at the same time,the asset structure will change,and the asset-liability ratio and the turnover rate of total assets will decrease in various degrees;(2)the accumulated depreciation of right-of-use assets and finance costs in the subsequent measurement will in turn affect enterprise profit and loss,making net profit lower before and higher after the profitability;(3)Cash outflow from operating activities within the cash flow statement flows to financing activities,the total amount remains unchanged,but the change is beneficial to the enterprise to improve its operation;(4)The notes to the financial statements are more comprehensive and detailed in their disclosure.At the same time,an analysis of the behavioural decisions of investors,Eastern Airlines and other key stakeholders on the basis of the changes in financial data under the new leasing standard revealed the following findings:(1)The adverse fluctuations in financial indicators brought about by the implementation of the new leasing standard did not affect the behaviour of investors due to the functional lock-in phenomenon of investors;(2)Eastern Airlines mainly adopted measures such as rationalizing its capital structure to optimize its financing methods,giving full play to the advantages of exemption clauses and leasing services to innovate leasing methods,acquiring aircraft and engines,strengthening communication with stakeholders and using derivative instruments to avoid market risks to cope with the changes brought about by the standard;(3)Other key stakeholders are making behavioural decisions about the implementation of the new Code by taking advantage of exemptions,reforming their business models,adjusting credit limits,etc.Based on the findings of this paper,the following recommendations are made: for investors,they should fully understand and use the information of the company to avoid being bound by certain superficial information;for airlines:(1)adopt sound financing methods to meet capital requirements;(2)Full use of waiver clauses,innovative leasing and timely fleet restructuring;(3)strengthen communication with stakeholders;(4)enter into interest rate swap agreements and foreign exchange forward contracts to hedge the leasing market risks under the new Code.For other stakeholders it is possible to:(1)adjust the business structure in a timely manner and identify new business opportunities to cope with the arrival of new standards;(2)keep an eye on the credit lines of airlines to avoid over-crediting and reduce risk exposure.