Big bang or gradual convergence of U.S. and international accounting standards? That is the question the Securities and Exchange Commission plans to decide by year-end, and a white paper it released in May that outlines a convergence approach is likely to play a significant role in its decision.

A big bang approach would involve setting a date by which generally accepted accounting principles (GAAP) in the United States would have to convert to International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB).

The SEC white paper instead describes a more gradual, two-phase process that it suggests could take five to seven years.

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