Last Friday the final report from staff members of the Securities and Exchange Commission on whether to incorporate global accounting standards into U.S. accounting methods seemed to put the concept of global convergence further back on the shelf.

The 137-page report did attempt to consider all possible ways to align international financial reporting standards (IFRS), which are set by the International Accounting Standards Board (IASB), with U.S. generally accepted accounting principles (GAAP). But the staff made it clear that putting the IASB in the driver’s seat would be out of the question. According to the report, “it became apparent to the staff that pursuing the designation of the standards of the IASB as authoritative was, among other things, not supported by the vast majority of participants in the U.S. capital markets.”

The report puts the convergence effort back a few steps, says Keith Peterka, shareholder with accounting advisory Mayer Hoffman McCann and a member of the firm’s Professional Standards Group. And that might well be a good thing, he thinks. “Is the idea of having one global accounting standard plausible?” he ponders. Enforcing those standards, when and if they converge, could be equally daunting. Since the SEC is the “gold standard for enforcement mechanism,” he says, matching that level globally could be quite difficult.

The report came as a surprise to financial-reporting mavens who had been expecting the SEC staff to move further toward convergence. Many CFOs and accounting professionals, however, still expect the SEC to come out with some Americanized version of IFRS to coexist with GAAP.

Not having the United States on board right now, though, puts the global accounting standards effort in question. “The U.S. is obviously such an important economy. It is very difficult to hold out that you truly have global standards without the U.S. being a participant,” says Stephen Chipman, CEO of Grant Thornton.

The SEC staff began the onerous task of studying whether or not to move from U.S.-based accounting standards to the globally followed IFRS in a Work Plan in 2010. The U.S. Financial Accounting Standards Board (FASB) and the IASB have been working toward accounting convergence since 2002.

Since then, adoption of global standards has led to heated discussions on both sides of the Atlantic, with several participants seeing the fight as a power struggle. The SEC has been criticized for holding up progress for too long, while the IASB has been asked by lobbyists to slow down some of its progress on issues that were overly sensitive or costly.

Concerns over preserving FASB’s role in accounting standards-setting has also been an issue in holding up discussions, market participants say. When considering the authority of FASB and the IASB, the new report noted that “a robust FASB hedges against IASB failure to develop high-quality standards appropriate for U.S. capital markets.”

The significant expense that both large and small companies could incur in any switch from GAAP to IFRS was also a sticking point presented in the report. “Many of the issuers indicated that the costs of full IFRS adoption easily could be among the most significant costs ever required from an accounting perspective,” the staff noted. Feedback from some comment letters suggested that moving straight to IFRS could spawn significant costs for companies.

U.S. GAAP has traditionally been seen as more of a rules-based approach and IFRS is more of a principles-based accounting method. Such basic differences are still providing challenges for convergence. The staff report cited several areas in which the accounting approaches diverge, such as impairment models for property, plant, and equipment, as well as inventory and intangible assets. Similarly, the measurement of certain assets under IFRS is different from that of U.S. GAAP. Other ways the methods diverge include costs for research and development and accounting for income taxes.

International watchers of U.S. accounting moves were unhappy with all of the reasons cited in the report for caution on convergence. Michel Prada, chairman of the trustees of the IFRS Foundation, regretted that the SEC did not make a recommendation about IFRS adoption, saying the report only adds to the uncertainty. “For the benefit of both U.S. and international stakeholders, the Trustees look forward to the SEC resolving the continued uncertainty regarding the U.S.’s commitment to global accounting standards,” he said in a statement.

But for some, not committing the United States to convergence just yet may not be such a bad thing. “Time is actually not the enemy. Time can be the friend. If the international community is willing for it to take a little bit longer for the U.S. to get there and the SEC is willing to commit to a time line, albeit a slightly longer time line, then we can still get this done,” adds Grant Thornton’s Chipman.

The SEC staff report notes that the commission has not actually approved the staff report. But it will undoubtedly be a key tool for making the decision about whether the United States should adopt international accounting standards. A formal SEC decision could still come anytime — or it could take months, since no formal time frame for making a recommendation on IFRS has been given, according to an SEC spokesperson. Comments on the report are also still being collected.