Impacts on the financial statements and financial performance of Spring Airlines after the implementation of IFRS 16
Dong, Yiying (2022)
2022
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2022111422574
https://urn.fi/URN:NBN:fi:amk-2022111422574
Tiivistelmä
The thesis has studied the impacts on the financial statements and financial performance of Spring Airlines after the implementation of IFRS 16. The current ASBE 21 2006 separates finance leases and operating leases, creating the phenomenon of off-balance sheet financing, which causes the financial statements to fail to accurately reflect the financial position of the enterprise and affects the transparency, accuracy and quality of financial statements. IASB has issued a new IFRS 16, combining the two types of leases. At the same time, the Chinese Ministry of Finance issued ASBE 21 2018, which is similar to IFRS 16 and requires publicly listed companies in China to implement the new standard from 01 January 2021. Thus, the study of IFRS 16 has important practical significance for publicly listed companies in China.
Spring Airlines, the largest private airline in China, is chosen as the case company for this thesis to analyse the impact of IFRS 16 on its financial statements. The thesis begins with desktop research and literature review for the comparison of IFRS 16 and ASBE21 2006 standards, the bookkeeping method of lease accounting under different standards. After that, the author then used quantitative research to collect financial data from Spring Airlines’ annual statements and adjust the financial statements in accordance with the requirements of the IFRS 16, calculating the adjusted financial ratios, calculating and analysing Spring Airlines' debt repayment ability, operating ability, profitability and bankruptcy risk.
The research has led to the main conclusions of this thesis. The implementation of IFRS 16 will have an impact on Spring Airlines, with an increase in the company's assets and liabilities, a significant increase in the company's costs and expenses, and a downward trend in financial ratios, the company's bankruptcy risk has increased as well, which has an impact on Spring Airlines' future development.
Spring Airlines, the largest private airline in China, is chosen as the case company for this thesis to analyse the impact of IFRS 16 on its financial statements. The thesis begins with desktop research and literature review for the comparison of IFRS 16 and ASBE21 2006 standards, the bookkeeping method of lease accounting under different standards. After that, the author then used quantitative research to collect financial data from Spring Airlines’ annual statements and adjust the financial statements in accordance with the requirements of the IFRS 16, calculating the adjusted financial ratios, calculating and analysing Spring Airlines' debt repayment ability, operating ability, profitability and bankruptcy risk.
The research has led to the main conclusions of this thesis. The implementation of IFRS 16 will have an impact on Spring Airlines, with an increase in the company's assets and liabilities, a significant increase in the company's costs and expenses, and a downward trend in financial ratios, the company's bankruptcy risk has increased as well, which has an impact on Spring Airlines' future development.