Boring. Tedious. Byzantine. Inscrutable. Any way you care to describe it, a discussion of corporate accounting standards will bring any dinner party conversation to a crashing halt. But with two-thirds of U.S. investors holding foreign securities, it would make a whole lot of sense for all companies across the globe to count their beans using the same language.

Here in the U.S. we use so-called generally accepted accounting principles, also known as good old GAAP. The problem is that about a hundred other countries around the world use IFRS, short for International Financial Reporting Standards. So when the Securities and Exchange Commission kicked off a multistep process last week aimed at getting U.S. companies to start using IFRS, it didn't just mean the end of GAAP, it also meant accountants -- and stock holders -- will have to learn a new language. Call it Esperanto for Investors, and like our high school French class, we don't expect it to go smoothly.

Just take a look at this 77-page primer by accounting firm PricewaterhouseCoopers on GAAP vs. IFRS. It's enough to make anyone profoundly grateful not to be an accountant. Even the smallest sampling of some of the differences can induce a migraine. (See chart.)

Proponents of IFRS argue that having just one set of standards will ultimately save companies money. That makes sense. Far-flung multinational corporations are extremely complicated financial entities, and reconciling all their numbers to different rules and standards takes legions of accountants and auditors.

Another supposed benefit -- and one that is painfully relevant to the financial crisis du jour -- is that IFRS is considered to be much more strict in forcing companies to keep things like special purpose entities on their balance sheets. That would help keep nasty surprises (like writing off hundreds of billions of dollars in off-the-books mortgage-backed securities) to a minimum. Investors in Enron would've been well served by a can of IFRS whoop-ass.

The SEC says the transition will be gradual, but it might not be gradual enough. Roughly 110 big U.S. multinationals would be allowed to report earnings under IFRS starting in 2010. A full transition for most everyone else would take effect in 2014. But that may be way too steep a learning curve for businesses and accountants in too short time.

James D. Cox, Brainerd Currie Professor of Law at Duke University, says there are huge implications for this change that the SEC has not fully thought through. "The movement to IFRS is such a big issue that it ultimately spells the death of GAAP for all purposes in the U.S. so that even small businesses and local accountants need to retool."

More worrisome for retail investors are the ways in which they've learned and are habituated to pricing shares. As Credit Suisse analysts pointed out last week, changes in accounting can result in changes in both investor and corporate behavior that can impact valuations.

It's not that we love GAAP. And we're certainly not xenophobic about international accounting standards. But a big change is on the horizon at a time when the corporate earnings are perilous and the markets are in turmoil. Esperanto for accounting standards makes a lot of sense. Let's just make sure we go slow enough to leave no child, or rather investor, behind.

Source: PricewaterhouseCoopers, The Wall Street Journal