A Study On The Financial Impact Of The New Lease Standards On China Eastern Airlines

In 2016,The International Accounting Standards Board(IASB)issued a new leasing standard,International Financial Reporting Standards No.16-Leasing(IFRS16),which came into effect in January 2019.In order to solve the existing problems of my country’s leasing standards in the operation of enterprises and maintain the convergence of international accounting standards,on January 8,2018,the Ministry of Finance of my country issued the "Accounting Standards for Business Enterprises No.21-Leases(Revised)" Comments are solicited.There are major changes in the definition of lease,the accounting treatment of lessees,the recognition of leased assets,etc.in the revised draft.The changes have disruptive changes to the current leasing standards and have a huge impact on the leasing industry.It is a leap forward in the development of leasing standards.Scholars at home and abroad have carried out forecasting research on the effect of standard implementation before the implementation of the lease standard,and generally believe that the implementation of the new lease standard can improve the quality of accounting information and reduce off-balance-sheet financingFor the aviation industry,Not only do operating lease aircraft allow airlines to rapidly expand their fleets,but they also provide significant financing capabilities and operational flexibility to accommodate evolving aircraft type requirements.In December 2018,the new leasing standards were officially adopted and required to be implemented from January 2019.They are valid for companies that prepare financial reports in accordance with the International Financial Reporting Standards or the Accounting Standards for Business Enterprises.Other companies that are applicable to the Accounting Standards for Business Enterprises will be Effective January 1,2021.The implementation of the new leasing standards will definitely have an impact on aviation companies with a high proportion of leasing business.Based on the lease standard reform,this paper studies the impact of the lease standard reform on air transport,discusses the adaptive decision-making of the lease standard reform,and analyzes the implementation of the new lease standard by taking China Eastern Airlines as an example.This article analyzes the influence of changes in the company’s financial data on China Eastern Airlines’ financial risk control and financial activities under the old and new leasing standards.At the same time,from a practical point of view,it discusses how Eastern Airlines can reduce the impact of these changes,and discusses its effectiveness and its positive guiding role in the management decision-making of the enterprise.Finally,this article puts forward suggestions for other companies implementing the new lease standardThis study found that:(1)China Eastern Airlines had a large scale of operating lease assets before the formal implementation of the new lease,so after the implementation of the new lease criteria,the scale of its assets and liabilities expanded,and the expenses on the income statement showed the characteristics of high before and low after,which remained unchanged overall,while the total cash flow remained unchanged;(2)Affected by the new leasing standards on financial information,China Eastern Airlines is likely to not only increase the difficulty of debt financing,but also bear greater financial risks;(3)In order to adapt to the changes brought about by the new leasing standards,China Eastern Airlines should take measures to analyze and compare the methods of asset introduction,strengthen the information management of leased assets,strengthen risk management,change strategic strategies,and improve internal core competitiveness to eliminate the adverse financial impact after the implementation of the new leasing standards.