The company said it overstated its pre-tax income by 918m ($1.4bn), or by 36%, between 1997 and 2001.

The disclosure came as part Xeroxs terms of a settlement with the US Securities and Exchange Commission, which also included paying a 7m fine (PrintWeek, 19 April). Xerox shares fell 13% to 4.57.

A spokesman for Xerox said the company would now be able to bring forward 1.2bn of revenues, which will appear in its 2002 results.

Xerox also said that unlike other companies recently reported accounting misdemeanours, Xerox had not reported fictitious volumes.

For the period 1997-2001, Xerox admitted exaggerating some 4.1bn of previously recorded equipment sales revenue. But the impact was partially offset by a 3.3bn under-valuation of revenues reported during the same period as servicing, rental and document outsourcing.

The company said the reversal of the equipment sale revenue was larger than expected due to changes in its lease accounting in Latin America from equipment sales to rental.

* Xerox has also launched its new workhorse digital press the DocuColor 6060, to complement its DocuColor 2000 series.

The Docucolor 6060 has three new front ends: the EFI EXP6000, Creo CXP6000 and Xerox DocuSP 6000XC.

Story by Andy Scott