The US Securities and Exchange Commission voted unanimously yesterday (5-0) to propose a “roadmap” to what has been termed accounting convergence. The proposal provides a timetable toward the lofty goal of a single set of global accounting standards. Specifically, a small number of US-based companies (estimated to be slightly more than 100) could be eligible in 2009 to switch from reporting under US GAAP to reporting under IFRS. To be eligible, the company would need to be one of the 20 largest companies in its global peer group, with many peers already using IFRS.

Longer term, the proposal envisions moving large US registrants to IFRS in 2014, mid-size companies adopting in 2015 and the bulk of the remainder adopting in 2016. However, there are some caveats to these long-term milestones including a stabilized funding mechanism for the International Accounting Standards Board. There will be a checkpoint in 2011, at which point in time a new SEC Chairman would make a “go or no-go” decision on the longer term IFRS adoption schedule. Some have wondered whether the US Congress will ultimately weigh in on this issue. A wholesale adoption of IFRS would mean that US-based companies, for the first time, are utilizing accounting standards not promulgated by a US-based standard-setter. In other words, politics could play a role in the ultimate outcome of these efforts.

Having said that, this roadmap is a necessary step to spur to action all the training, education and other work to be done so that investors, analysts and all users of financial reports are ready if and when US-based companies begin to report using IFRS.