SEC Eyes Xerox Lease Accounting
Jan. 07, 2002
STAMFORD, Conn. (AP) _ The Securities and Exchange Commission has told Xerox Corp. that its method of accounting for sales-type leases does not follow standard practice.
SEC's Office of Chief Accountant advised Xerox that it has not followed the methodology required by the Financial Accounting Standards Board, Xerox said in a regulatory filing Monday. The FASB sets accounting standards for U.S. companies.
At issue is when Xerox accounts for revenue from selling and leasing its equipment. The SEC has been investigating whether Xerox booked too much revenue up front rather than over the life of leases.
Xerox said it believes the financial results it reports comply with the standards, but earlier restated some of its finances.
The regulatory filing represents an update of the SEC's investigation and does not reflect a new or expanded probe, said Christa Carone, a Xerox spokeswoman.
Xerox also announced Monday its intention to raise $500 million for general corporate purposes, including paying off debt. The company will issue senior notes to qualified institutional buyers.
Last week, Moody's Investors Service placed the long-term debt ratings of Xerox under review for a possible downgrade. Xerox has already seen its debt ratings reduced to junk bond status.
Xerox stock fell 1.7 percent, or 17 cents, to close at $9.88 in trading Monday on the New York Stock Exchange.
On the Net: