A Study On The Financial Impact Of The New Leasing Standards On The Retail Enterprises

In December 2018,China’s Ministry of Finance issued the Accounting Standards for Business Enterprises No.21-Leasing,stipulation that enterprises implementing accounting standards for Business Enterprises will implement the new standards from January 1,2021.The formal implementation of the new leasing standards marks that the phenomenon of lessee using operating lease for "off-balance sheet financing" no longer exists.The assets and liabilities related to the lease shall be presented in the financial statements.With the increasingly fierce competition in the retail enterprise in recent years and the increasing uncertainty of the external macro environment,the business performance of most retail enterprises declined seriously in 2021.The formal implementation of the new leasing standards also has a certain impact on the enterprises that mainly use operating leasing for their stores.Therefore,this thesis selects the typical Y company as a case in retail enterprises,the main research the financial impact of the new lease criterion for Y company.After a brief introduction of the operating status of retail enterprises,leasing status and the basic situation of case company Y,this thesis first analyzes Y Company’s connection treatment to the new leasing standards and related accounting treatment under the new leasing standards,which lays a foundation for the analysis of the impact of the new leasing standards on financial statements below.Secondly,it analyzes in detail the impact of the new leasing standards on Y company’s financial statements,financial performance and financial strategy,which is the core content of this thesis.Finally,according to the above analysis results,relevant suggestions are put forward for Y Company to better apply the new leasing standards,mainly from the three aspects of financing,investment and operation management.The research conclusions of this thesis show that: first,the implementation of the new leasing standards has a great impact on the balance sheet and income statement of retail enterprises,with the total assets and liabilities rising and profits decreasing.In terms of financial performance,the new lease rules increase the equity multiplier and equity ratio,weaken the debt paying ability,and reduce the net interest rate on sales and equity.Secondly,the new leasing standards will have a negative impact on the financial strategy matrix and specific financial strategies of retail enterprises,and affect the value creation ability and capital status of enterprises.Finally,in order to adapt to the impact brought by the new leasing standards,Y Company needs to make corresponding adjustments.