If, and only if

The International Accounting Standard Board sprinkle their standards with the threatening phrases of ‘if, and only if’ and ‘when, and only when’. The threat though is a hollow one. What happens to an accountant who doesn’t follow their emphatic instruction? They never explain.  Because there are no consequences.

The champion of ‘if, and only if’ is IAS 36 with five of these warning phrases. Let’s take one them. They are all as important as each other so my choice is not an issue:

“If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount.” [1]

This sentence sounds silly from multiple repetition: two ifs, two assets, two carryings, two recoverable and three amounts, so the insistent ‘if and only if’ becomes ridiculous.

Two other IASs qualify as champions for  ‘when, and only when’, three each in IAS 40 and IAS 41.

“An entity shall transfer a property to, or from, investment property when, and only when, there is a change in use.” [2]

Now it is clear that transferring property in and out of investment is such a frequent, above all such an important accounting occurrence, this ‘when’ phrase becomes a must. Note the sarcasm! Here is the proof that the writers of the standards insert these expressions on a whim, without logic.

Sometimes they scatter standards with the less emphatic ‘only if’ and ‘only when’. Some standards use all four expressions, the champion being IAS 37 with eight. Some use none at all.  Many have one or two. Again choices are haphazard.

So what is going on? I guess nothing much, just frivolity to comment on.

[1] International Accounting Standard 36 Impairment of Assets, IAS 36, paragraph 59

[2] International Accounting Standard 40 Investment Property, IAS 40, paragraph 57