European companies are pushing to be allowed to use a European Union variant of international financial reporting standards when communicating with US investors, in a row that some fear could see a proliferation of localised versions of the rules.

A group of multi-nationals, including Royal Dutch Shell, L'Oreal and Unilever, have written to the Securities and Exchange Commission making the proposal.

IFRS was introduced to increase comparability, so the new variation would run counter to the spirit of the project.

The SEC is to permit companies in the US to file under IFRS rather than under US GAAP, but the US version of the IFRS rules, essentially the original IASB version, is different from that used in the EU.

It is thought that language differences will be a significant variant, with different nuances in rules meaning different things to companies from different countries in the EU.

The SEC is insisting on filing in English, at least.

'It is perfectly understandable that the [SEC] staff's understanding of IFRS is based on the English language version, and that its future comments will be based on this version.

'Companies from non-English speaking countries, however, should not be required to use the English language version, which would increase the risk of error, and which would make it impracticable to publish the same financial statements in the United States and in the home country,' the letter from the European Association of Listed Companies (EALIC) said.

The letter suggested that translation discrepancies be dealt through the comment process, and international dialogue.

The companies also suggested that European companies could choose to leave the US market if they did not find the proposed rule favourable, which would 'seriously hinder the convergence process'.