The European Union's top accounting expert will recommend that the region quickly endorses controversial book-keeping rules criticised by banks so its companies can issue comparable financial reports next year.
The EU wants its listed firms to start using International Accounting Standards (IAS) in 2005 but has yet to endorse two rules - known as IAS 39 and 32 - that critics say could play havoc with banks' profits.
Stig Enevoldsen, who chairs an expert committee charged with advising the European Commission on accounting, told Reuters in an interview late on Wednesday he was in favour of backing the new rules and believed the experts would follow his advice.
"My recommendation would be to go ahead. Timing is crucial now and the process has to get started," said Enevoldsen, who is also a partner with Deloitte & Touche in Denmark.
"Companies cannot wait until the end of December to know what standards to implement on January 1. Some of these are big companies, with many subsidiaries around the world. It's important that they get certainty on where to move."
EU accounting experts, grouped in the European Financial Reporting Advisory Group, were discussing the issue on Thursday and will issue their recommendation by the end of May to allow last minute talks between the banks and global standard setters.
The opinion, although authoritative, has no legal force and the ultimate decision rests with the European Commission.
The International Accounting Standards Board (IASB), a London-based independent group of accounting rule makers, wants firms to use market values instead of historical costs for financial instruments such as loans, bonds and shares.
This is contrary to the practice of banks in countries such as France, Italy and Spain and could punch big holes into their balance sheets once introduced.
Enevoldsen said that both the IASB and the banks had showed some flexibility and only a few technical issues remained open.
"Are we talking about stopping it all because we don't like one paragraph out of 500 pages? That is exaggerating," he said.
"The standards are very important to some banks in some countries. But we need to put things in perspective and sometime that perspective is lost in the debate about the technical details."
Enevoldsen said it was encouraging that the European Central Bank, which had initially voiced concerns about the adoption of the standards, had dropped its objections.
This change of position may help stifle resistance by French banks, so far the most formidable opponents to the standards.
"If (ECB President Jean-Claude) Trichet is now supportive that may influence the views of the French government," he said.
A decision to repel the two standards would jeopardise Europe's goal of harmonising accounting standards, leaving companies free to continue to use national standards to value certain financial instruments.
"That would be very unfortunate because it would not give transparent financial reporting in Europe. It would leave a big open item on financial instruments," Enevoldsen said.