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The effects of new lease accounting standards on enterprises financial risk: evidence from China

Jinfeng Xue & Badrul Hisham Kamaruddin

Accounting Research Journal2026https://doi.org/10.1108/arj-10-2024-0351article
AJG 2ABDC B
Weight
0.50

Abstract

Purpose This research aims to evaluate how the new lease accounting standards IFRS 16 and CAS 21 influence financial risk in enterprises; analyze the mediating effects of enterprise financing constraints, financing efficiency and real earnings management; examine the heterogeneous effects across different enterprise characteristics such as enterprise ownership concentration and leasing levels. Design/methodology/approach This research uses the staggered implementation of CAS21 in China, selects annual data of 2,803 Chinese listed enterprises from 2018 to 2023 and adopts a multiple time point difference-in-difference model for analysis. Findings This study reveals that enterprises implementing the new standards have encountered an increase in financial risk; this increase averages about 16.55%. The new standards mainly increase the financial risks by increasing the degree of financing constraints, reducing financing efficiency and increasing the real earnings management. The impact is particularly significant for enterprises that have higher financing constraints and higher levels of leasing. There are also notable differences between enterprises with different financing efficiencies and ownership-concentration levels. Originality/value Previous studies only focused on a single accounting ratio risk indicator. To the best of the authors’ knowledge, this paper is the first to use the Z-score model for financial risk assessment and, for the first time, conducts in-depth analysis from the aspects of enterprise financing constraints, financing efficiency, real earnings management, ownership concentration and leasing levels. It provides a detailed overview of how the new standards influence enterprise financial risks in terms of both extent and direction.

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https://doi.org/https://doi.org/10.1108/arj-10-2024-0351

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@article{jinfeng2026,
  title        = {{The effects of new lease accounting standards on enterprises financial risk: evidence from China}},
  author       = {Jinfeng Xue & Badrul Hisham Kamaruddin},
  journal      = {Accounting Research Journal},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1108/arj-10-2024-0351},
}

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The effects of new lease accounting standards on enterprises financial risk: evidence from China

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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