Large, listed UK companies could spend up to £625,000 each to prepare their IT systems for new international financial reporting standards.
A survey of 1,000 European companies by JMH Financial Services canvassed opinion on cost and readiness for the International Accounting Standard 39 due on 1 January 2005.
The report estimates the average compliance costs across UK companies to be about £360,000.
This figure rises to £446,000 for a top-500 company; £625,000 for those with a market capitalisation of between £1bn and 2bn; and over £1m for companies valued at more than £2bn.
IAS 39 is designed to regulate accounting rules on a global scale and improve the transparency of company accounts. It affects financial services companies most.
It applies to the classification and measurement of derivatives, hedge funds and other financial listings in IAS 39.
Companies will have to ensure that accounting systems are ready long before the 2005 deadline in order to prepare at least one year's comparative financial statements.
From January 2004 companies will have to run two sets of parallel accounts, one following the old rules and another for the new.
This, as well as the recoding of the connections between enterprise resource planning to group accounting systems, will make up the bulk of the costs.
Gary Simon, business intelligence principal at Deloitte Consulting, explained that companies are making major changes to the basis of their data entry because of the way different expenses are defined.
"This will feed through to changes that will have to be fed through group reporting systems. A lot of companies will have to review the way contractual transactions have been classified," he said.
Software vendor The General Ledger Company suggested that companies should prepare for all accounting regulations, including IAS 39 and Sarbanes-Oxley, by making changes to their general ledger.
Nick Gomersall, sales and marketing manager at General Ledger, said: "If a company's general ledger can only hold one set of books and relies on data warehousing to produce accounts, there is a potential for actual profit and loss figures to be inaccurate.
But Simon maintained that, in the short term, companies don't have the time or resources to do this and will turn to short-term fixes and outsourced help to meet deadlines for producing comparative accounts.
IAS 39 will affect at least 1,650 UK companies. All European Union member states have signed up to the regulations so that any EU-listed company must comply with its standards or face heavy fines.
We sacrificed our weekend to try out the new Vikendi map coming to PUBG - and rather liked it
12 of the 32 stars observed feature rings and gaps that are usually carved by planets in the process of formation
The experiment is currently underway at South Korea's Yangyang Underground Laboratory
Exoplanet HAT-P-11b is located about 124 light years from Earth