A note on IFRS/GAAP convergence, a subject that's been somewhat in the background these days. In the wake of the credit/liquidity turmoil, the IASB is seeking to overturn a difference in the two sets of standards: today it is considering the adoption of an exception in US GAAP that allows for the reclassification of trading securities into held to maturity. There's no such exception in international financial reporting standards.

Wait - there's more. the trustees of the IASC Foundation, the IASB's oversight board, is willing to overlook the normal due process of gathering comment and open discussion on such a move.

At a time when the IASB is seeking to become the globe's pre-eminent accounting standard-setter, with the interests of investors at stake, the actions taken by the trustees to bypass due process are bad enough. To do so in order "to seek a level playing field" with US GAAP is even worse; the "held for trading" transfer exception sought by the Board only adds to the complexity and inanity of attempts to mollify critics of fair value accounting for financial instruments. Seeking convergence in this regard may seem like a small matter, when in fact it's a giant step backwards.

Instead of being a global leader, the IASB is appearing to be a quite malleable standard setter. If it goes down this path, it will only be worsening investor concerns over the degree of political influence to which it will be subjected if it is the only accounting standard setter on the planet.