On Friday evening - the day before the G20 summit began in Washington - the SEC released the long-awaited roadmap for converting the United States financial reporting system to International Financial Reporting Standards.

The document will have a 90 day comment period, which will begin ticking once it's recorded in the Federal Register - and that will probably take place in less than two weeks. Say it's in the register one week from the day the SEC released it: that would put the comment period's end at February 19, 2009.

It's a proposal that will span two administrations - and we really don't have an idea how the new administration is going to view the proposal. When an SEC chair is named, it'll be clearer - and with the current market turmoil, you'd have to believe that President-elect Obama will not waste time on this choice.

A key premise in the 165-page document: the pause for deciding. While it's encouraging companies to take the option and apply IFRS to their own reporting before it becomes a requirement, the Commission has left itself the option to stop the convergence process in 2011. It will depend on the Commission is satisfied with progress toward achieving seven milestones related to:

• improvements in accounting standards;

• the accountability and funding of the IASC Foundation;

• the improvement in the ability to use interactive data for IFRS reporting;

• education and training relating to IFRS;

• limited early use of IFRS where this would enhance comparability for U.S. investors;

• the anticipated timing of future rulemaking by the Commission; and

• the implementation of the mandatory use of IFRS by U.S. issuers.

If it's satisfied with progress in the next three years, then the Commission will proceed with requiring U.S. issuers use IFRS beginning in 2014.

The declarations made at the G-20 summit will likely propel American companies down the IFRS road - so it will be critical for investors to pay attention to the roadmap. They might not like where they are at the end of the road. Some of the  declarations have very strong implications for accounting as we know it. An excerpt: 

Immediate Actions by March 31, 2009:

* The key global accounting standards bodies should work to enhance guidance for valuation of securities, also taking into account the valuation of complex, illiquid products, especially during times of stress.

* Accounting standard setters should significantly advance their work to address weaknesses in accounting and disclosure standards for off-balance sheet vehicles.

* Regulators and accounting standard setters should enhance the required disclosure of complex financial instruments by firms to market participants.

* With a view toward promoting financial stability, the governance of the international accounting standard setting body should be further enhanced, including by undertaking a review of its membership, in particular in order to ensure transparency, accountability, and an appropriate relationship between this independent body and the relevant authorities.

* Private sector bodies that have already developed best practices for private pools of capital and/or hedge funds should bring forward proposals for a set of unified best practices. Finance Ministers should assess the adequacy of these proposals, drawing upon the analysis of regulators, the expanded FSF, and other relevant bodies.

Medium-term actions:

* The key global accounting standards bodies should work intensively toward the objective of creating a single high-quality global standard.

* Regulators, supervisors, and accounting standard setters, as appropriate, should work with each other and the private sector on an ongoing basis to ensure consistent application and enforcement of high-quality accounting standards.

* Financial institutions should provide enhanced risk disclosures in their reporting and disclose all losses on an ongoing basis, consistent with international best practice, as appropriate. Regulators should work to ensure that a financial institution' financial statements include a complete, accurate, and timely picture of the firm's activities (including off-balance sheet activities) and are reported on a consistent and regular basis.

So let's read the tea leaves and see what to expect by March 31, 2009:

• There will be more guidance on Level 2 and Level 3 valuations from the FASB or the SEC;

• The FASB proposals for modifying Statement 140 and FIN 46R should be turned into completed standards;

• The anointing of the IASB monitoring board as "good enough" to ensure independence of the IASB;

• Maybe even a staff accounting bulletin from the SEC on disclosures about complex financial instruments.

In the "medium-term" - whatever that is - expect the continued convergence process of the US standards with the international standards, along with the continued mutual recognition of the efforts of securities regulators around the world.

There was one ominous-sounding declaration, one that didn't name fair value accounting specifically, but read between the lines in this excerpt from "Reinforcing International Cooperation:"

Medium-term actions:
 * Authorities, drawing especially on the work of regulators, should collect information on areas where convergence in regulatory practices such as accounting standards, auditing, and deposit insurance is making progress, is in need of accelerated progress, or where there may be potential for progress.

* Authorities should ensure that temporary measures to restore stability and confidence have minimal distortions and are unwound in a timely, well-sequenced and coordinated manner. 

That underlined sentence is intriguing and worrisome: "Temporary measures to restore stability and confidence have minimal distortions?" That sounds like an imposition of a moratorium on fair value reporting. And it sounds totally zany: a temporary measure to produce confidence that also will produce distortions? Makes complete sense: if you spend your life walking around on your hands. "Unwound in a timely, well-sequenced, coordinated manner?" Sounds like this could take place globally and over a long period of time - which could be protracted even further by those who would benefit from non-transparent reporting. (See: bank managements.)

More to come, for sure. Is  a live issue or is the document dead on arrival? Much depends on the new administration's picks and plans. Stay tuned.