Which One When?

Still, project-by-project convergence could result in a far less radical path than what is currently being touted. The end product could simply be "multiple, different accounting standards that are more alike than different," but not identical, Proestakes said.

Either way, ignoring auditors' clamoring and delaying action is likely to be the best strategy for most companies, since more time should yield more certainty and lower costs. As of now, the SEC estimates, a transition could consume from 0.125 percent to 0.13 percent of a public company's revenue in the first year, including substantial staff time. Martin Headley, CFO of $526 million semiconductor automation firm Brooks Automation, for example, plans to take a minimalist approach to IFRS, training some key individuals on his staff, rather than replacing them or hiring more experts. Still, he said at a recent conference, "I'll be waiting until I'm sure it's actually going to happen."

No doubt he'll be in good company. Under one scenario, U.S. companies could reach a state of perfect harmony with IFRS users with the barest effort. "In my mind, you'd never have to prepare for a switch to IFRS, because eventually U.S. GAAP and IFRS would become so closely aligned you'd get the same result by using either method," says the PCAOB's Niemeier.

XBRL
The promise — or threat, depending on your perspective — of a mandate to file financial statements in a new "interactive data" format has been looming for so long that most CFOs have long since tuned it out. Only about half claimed to be familiar with XBRL in a September survey by Grant Thornton, and a whopping 90 percent reported no plans to use it. While outgoing SEC chairman Cox has been one of its biggest champions, the process of making the language mandatory for financial reports has taken a tortuously slow path, culminating in a rule that hung suspended in proposal state for more than six months last year.

Assuming the SEC finalizes the rule as written before Cox leaves the building, though, companies with market caps of $5 billion and above (as of the end of last year's second quarter) would have to immediately start tagging their 2008 year-end financials with XBRL code and be able to handle the trickier task of coding footnotes in detail for 2009 10-Ks. Other large companies would start the process for 2009 financials, and smaller companies (with market caps of $75 million or less) will follow for 2010 reports.

Considering the myriad concerns expressed in the 50-plus comment letters the proposal generated, the quick turnaround might seem a scary proposition. However, many firms facing the imminent deadline have already started the process and are likely to be well prepared, says David Blaszkowsky, director of interactive data at the SEC. (It helps that they will have an additional 30 days to submit the data-tagged versions after filing their traditional 10-Ks and 10-Qs.)

International Paper is one of those companies. After one day of training and a practice filing, chief accounting officer Fred Bleier expects three of his staff members (a manager of financial reporting, a manager of financial systems, and a staff accounting person) to be able to easily handle XBRL coding going forward. "We don't see this as being hugely difficult for a company to do," Bleier says. He and his colleagues spent a leisurely four months meeting with vendors, and finally decided that buying software and tagging in-house would be more cost-effective than the easy alternative of outsourcing the whole project to a financial filing company. The project "is not a significant cost one way or another," says Bleier, but he sees savings in the second year, when software license fees will decline, versus outsourcing fees that would go up to accommodate the additional time needed to code footnotes in detail.

Even a move to IFRS is unlikely to derail the XBRL initiative. Blaszkowsky says that although none of the countries that have adopted XBRL have also adopted IFRS, tags for the international standards have existed since 2004 and have been updated every year since. "Companies could tag their prime financials in IFRS today," he says. The SEC platform couldn't currently accept them, but Blaszkowsky expects that it will take little effort to upgrade the system with the appropriate data codes.

The short ramp-up time is encouraging news for other companies that may be taking a wait-and-see approach, and Blaszkowsky says XBRL is likely to only get easier as momentum grows. "Clearly there are multiple ways of getting your content tagged, and I think best practices will emerge very quickly," he says. Not to mention he finds it "reasonable to expect" that ERP vendors will bake XBRL tags into their systems once it becomes a mandated language. "This is compelling to anyone engaged in financial markets; anyone who believes in transparency," he says. "It would be hard to see it as a political issue at all."

But are there benefits for the companies that implement it? Not so far, based on an assessment by members of Financial Executives International (FEI) who have been using XBRL as part of the SEC's nearly four-year-old voluntary filing program. "As preparers, we have learned that there are no improvements at this time in our internal processes as a result of creating and providing tagged information, and that preparers do, in fact, experience increased costs and efforts as a result," wrote Arnold Hanish, chairman of the FEI's Committee on Corporate Reporting, in a letter to the SEC's Committee on Improvements to Financial Reporting. Could that improve next year? "We'll have to wait and see how it plays out," Bleier says diplomatically.

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