Some observers argue that adoption of IFRS, rather than convergence, may be the better route. For one thing, adoption would eliminate "the arbitrage" between the two standards that has caused politicians to exert undue influence over what should be an independent standards-setting process, says DJ Gannon, a Deloitte & Touche partner specializing in international accounting and reporting. During the past year, U.S. lawmakers and European heads of state have pushed the Financial Accounting Standards Board and the International Accounting Standards Board, respectively, to change rules to eliminate any advantage American companies may have had over their international counterparts, or visa versa.

Further, Gannon told CFO.com that IFRS already has been blessed by the SEC as appropriate for use by foreign private issuers that list on U.S. exchanges. Still, "the SEC is sending a mixed message," says Gary Illiano, the national partner in charge of international and domestic accounting for Grant Thornton. He argues that the SEC contends that while IFRS "is good enough" for foreign private issuers and big companies that qualify for early adoption, it's not for the vast majority of public companies.

Accountants, like finance executives, cite some costly practical issues that will haunt their clients if the SEC decides to require IFRS. For example, if the SEC gives the green light to IFRS and sticks to its roadmap, companies would have to switch by year-end 2014 and include three years of comparative results. That timing would force companies to start reporting under IFRS beginning in 2012, which is impractical, claims Gannon. Again, the SEC took a more lenient stance with foreign private issues, waiving the three-year rule and requiring only a year's worth of comparative results for the first year those companies adopted IFRS.

Pragmatists also complain that besides data-gathering and systems changes, switching to IFRS would require companies to review items linked to U.S. GAAP, such as debt covenants, executive compensation, and investor-relations materials, says Illiano.

Meanwhile, the SEC must be mindful of how moving to IFRS will affect other regulators, including those that keep watch over banks, insurance companies, utilities, and pensions. Those rulemakers mandate their own brand of accounting, "but most start with U.S. GAAP," Stocker told CFO.com.

On the other side of the issue are companies that are well positioned to make the switch to IFRS, says Illiano. They include smaller U.S. companies that have been acquired by international companies that already use IFRS. Another group of possible IFRS rooters consists of non-American companies that move into the U.S. market through a reverse merger, added Stocker.

A popular way of raising capital is for a non-U.S. company to buy an American company that has shut down operations and exists only as a shell. The larger company goes through the merger, gives its stockholders 90% of the shell-company shares, and becomes an SEC registered company.

Real estate companies that are sired international holding companies probably wouldn't shy away from reporting results in IFRS, nor would existing American subsidiaries of non-U.S. companies.

Further, the American Institute of Certified Public Accountants, as well as some states, recently changed its rules to make IFRS acceptable for reporting the financial results of private companies. That means the affected accounting firms will be able to give a clean audit opinion to private-company clients that use IFRS without having to issue an audit report that explains the differences and exceptions related to U.S. GAAP.

The SEC is likely to take at least six months to mull over the comment letters. Gannon thinks an announcement will be made before the end of the year, likely around the same time the G20 leaders meet to announce what progress has been made on a variety of global projects, including the financial crisis. Gannon contends that the reason the SEC took several months before publishing its IFRS roadmap is that the regulator was waiting to see what the G20 had to say about accounting. In the end, "U.S. GAAP used to be the de facto [international] standard," but after 12 years, IFRS has now gained ground in terms of quality, asserts Gannon.

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