Inappropriate Accounting Standards At FujiFilm Essay

Need to find another inappropriate accounting practice on Fuji Xerox company and the cause of company accounting issue.

Answer:

Inappropriate Accounting standards at FujiFilm:

The company violated the “AASB 15 revenue from contracts with the customers” as Fuji Film Xerox constantly overstated the receipts from the customers. Fuji Film Xerox did not measure the revenue from the contracts with its customers based on the amounts of the considerations to which Fuji Film Xerox was entitled to receive. This led the company to regularly bring forward the revenue to meet the targets, regularly avoiding identifying the losses and untrue monthly accounting figures which chalked up the sale of assets or revenue to meet the missing millions.

The major part of blame was raised on the culture of “Sales at any price” that led to the payment of commissions and bonus along with the payment of massive amounts. The major reason for overstating the revenue was the managed service agreements that typically contained variable pricing depending upon the usage (Fujixerox.com 2018). The AASB 15 required Fuji Film Xerox to recognize the amount of revenue that reflects any form of trade discount and amount of rebates which an organization allows. The misuse of Managed Service Agreements turned out very commonplace that inappropriately identified revenue that was close to 30 per cent of the total sales in 2015.

The company recorded inappropriate amount of sales by using the methods of Managed Service Agreements with remaining amount of $55 million was not recorded fictitiously by comprised of the revenue that incorrectly recorded advances (Fujixerox.com 2018). The AASB 15 required Fuji Film Xerox to present the gains and losses based on the disposal of the non-current assets together with the investments and operational assets following the subtraction of the amount based on the carrying sum of the asset and the associated selling expenditure.

References

Fujifilmholdings.com. 2018. Report on inappropriate accounting at overseas subsidiaries of Fuji Xerox Co., Ltd. | FUJIFILM Holdings. [online] Available at: [Accessed 27 Apr. 2018].

Fujixerox.com. 2018. Fujixerox.com. [online] Available at: [Accessed 27 Apr. 2018]

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