The effects of new lease accounting standards on enterprises profitability level: evidence from China

• Jinfeng Xue ^[2] ; Badrul Hisham Kamaruddin ^[1]
  1. [1] City University

     City University

     DCC (Kotwali), Bangladés

     
  2. [2] Chongqing Institute of Engineering, Chongqing, China
• Localización: Revista española de financiación y contabilidad, ISSN 0210-2412, Vol. 54, Nº 4, 2025, págs. 397-422
• Idioma: inglés
• DOI: 10.1080/02102412.2025.2510027
• Texto completo no disponible (Saber más ...)
• Resumen

  • The research focused on companies listed on China’s between 2018 and 2023 to examine how the new lease accounting standards, IFRS 16 and CAS 21, affect their profitability level. The study utilises a multiple-time-point DID model for the analysis. The findings indicate that two years following the apply the new lease standards, companies profitability level has declined significantly, and this significance has gradually weakened after four years of implementation. Applying the new standards mainly reduces the profitability level of enterprises by increasing the enterprise financing constraints, improving the level of enterprise financial risks and investment efficiency. The new standards mainly reduce the enterprises profitability level with low financing constraints degrees, low financial risk levels and under-investment. It reduces the profitability level of non-state-owned companies, large-scale and small-scale companies, while it has no significant effect on the profitability level of state-owned companies and medium-scale companies.

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