Following a 2002 mandate from the European Commission, European companies took three years to change over their financial reporting systems from their home-country GAAP to International Financial Reporting Standards. By most public accounts, the change generally went smoothly for the companies that made the switch and the European securities market as a whole.

“We could have had 7,000 [companies] produce complete garbage but we didn’t,” said Richard Thorpe, head of accounting, auditing, and capital and groups policy at the U.K. Financial Services Authority.

So it would stand to reason that U.S. companies would likewise need only three years to transition to IFRS, right? That’s the thinking at least of the large multinationals domiciled in the United States that are hoping the Securities and Exchange Commission offers U.S. registrants the choice between filing their financials using IFRS rather than U.S. generally accepted accounting principles.

Such a move would bring efficiency and cost savings to a company like Procter & Gamble, whose foreign subsidiaries are already using IFRS. According to Mick Homan, comptroller of corporate accounting for P&G, the company just recently began thinking about an organization-wide conversion to IFRS. He told an SEC roundtable on Monday that such a project would take a minimum of two to three years and cost millions of dollars initially.

Homan, along with some of the other roundtable participants — who included representatives from accounting firms, a credit rating agency, and investment banks — suggested U.S. companies could benefit from their European counterparts’ experience of transitioning to IFRS.

The topic was raised during two SEC roundtables Monday designed to examine the effects and implications of letting U.S. companies choose between GAAP and IFRS, an idea the SEC floated earlier this year in a concept release. The commission is currently reviewing more than 85 comment letters that could lead to a formal proposal.

The change could be easier for U.S. companies, said Margaret Smyth, vice president and controller for United Technologies Corp. When European companies were in the process of making the change between the 2002 mandate and the filing of their IFRS-prepared statements in 2005, the International Accounting Standards Board hadn’t finalized many of its rules, creating confusion and shortening the amount of time European companies had to prepare for the change.

U.S. companies would have the advantage of the IFRS/GAAP standards being more closely aligned than they were a few years ago. The accounting convergence project has progressed, although many major differences still remain. “We’ve talked with companies that have made the transition who all point out that, ‘You’re lucky, it’ll be much easier for U.S. companies to convert to IFRS,'” Smyth said.

However, such logic doesn’t wash for Financial Accounting Standards Board chairman Robert Herz. “I hear some are saying it would be easier for us,” he said. “I don’t think that’s the case. We have the most complicated reporting system in place.”

While the SEC considers giving U.S. companies the IFRS option — and also thinks about mandating its use — the regulator needs to consider how difficult such a conversion will be, Herz said. Among the hindrances are bank regulators’ GAAP-based systems, as well as the state laws that have requirements based on U.S. GAAP. There’s also concern that not many U.S. accountants are knowledgeable enough about IFRS and that the two sets of auditing standards are not as similar to one another as the accounting rules.

To be sure, European companies’ experience of switching to IFRS was not without hand-wringing, costly implementation, and reworked processes. There was also confusion, noted the FSA’s Thorpe. The mandate “imposed an enormous burden on companies,” he said.

Gary Illiano, a partner at Grant Thornton, called the conversion “fairly traumatic but with good results.”

Still, none of the 14 roundtable participants disputed that a move to IFRS in the United States would be a worthwhile goal in the spirit of creating a single set of high-quality globally accepted accounting standards. But the panelists were torn over the best steps on how to get companies on board with such a plan.

Roundtable participants recommended that the SEC offer a transition phase of a dual accounting system before mandating that U.S. companies of all sizes start using IFRS. Some participants, such as Herz, stressed that the SEC should tightly limit how long both accounting standards could be used in SEC filings at the same time.

There was general agreement among the panelists that the SEC should take a phased-in approach, with smaller companies being the last to use IFRS.

Smyth suggested the SEC consider 2011 as a deadline for U.S. companies to transition to IFRS. That year China, India, Japan, and Canada also are scheduled to make the switch. With so many countries making the change, standard-setters may consider putting a moratorium on creating new standards during that time period, such as IASB did during European companies’ transition, Smyth said.

For now, large U.S. companies with interests abroad are slowly starting to consider how they could make the switch to IFRS. For Smyth, that has meant persuading the top executives and the board to buy in to such an idea and the creation two months ago of a group with representatives from UTC’s six business units to work on the project.

They are treating the concept as a major project rather than a technical accounting change. By using a project mindset, the company is thinking about training and hiring new people, and is consulting with an accounting firm. The project is headed by the same project leader who carried the company into Sarbanes-Oxley compliance. Smyth predicts UTC could start using IFRS as early as 2010 if the SEC gave such an allowance.