The US Securities and Exchange Commission (SEC) has warned it will not accept filings of accounts from European companies if the European Commission did not accept new proposals on derivatives accounting.
Mr Donald Nicolaisen, the SEC chief accountant said the proposals on the table were of "high standard" and if they were not adopted, it would be tough to expose the US investing community to European companies.
The International Accounting Standards Board (IASB) recently created a charter of standards bridging the gap between the widely respected US accounting standards and European standards.
The IASB, the SEC and executives at various accounting standard setting boards are hopeful convergence will take effect from 2005.
But the standards cannot take effect until the European Commission gets unanimous agreement; so far, the French have expressed reservations on a proposal to account for derivatives, instruments used by financial institutions to counter swings in interest rates.
Sources close to the situation said the French government has strong doubts about the proposal, which calls for the valuation of most of the assets and liabilities linked to the derivative instruments - a method followed in the United States.
The French concern is that individual valuation would heighten the volatility of the earnings of banks and insurance companies.
Some experts say the adoption of these rules, called IAS 39, would require French banks to become more transparent than ever.