And now for something completely different, just to be festive…

This is a proposal, apparently of Indian origin, that’s been knocking around the web for several years now – you can find it here for instance, and in many other places, sometimes with slight variations. As far as I can see, it’s not currently on the IASB’s official agenda, but I’m sure they’ll get to it right after they figure out the accounting for environmental depletion. The main issues addressed in IFRS 69 (and by the way, that’s the dirtiest joke right there) are, it says, the timing of recognition of a female friend as a girlfriend, the number of days the relationship can be carried on and any write down in this romantic relationship.” To head off the most obvious initial criticism, I’m sure many of its principles, with some tweaking (well, maybe quite a lot of tweaking), would be equally applicable to the no doubt forthcoming Accounting for Boyfriends. Here are some of the highlights.

The standard “applies to all GF’s except those whose father, brother, ex-boyfriends or prospective boyfriends are working in police, army, intelligence agencies or political organizations or 6+ feet tall, have muscular body and know kung fu, judo or any other martial art.” I’m sure this is for the most part a well-considered scope exclusion since there’s really no point incurring unnecessary physical pain, no matter how much you love accounting (I would have thought political organizations were mostly full of nerds, but maybe that’s the difference between here and India).

Among the definitions, we learn “LOVE is a serious mental disease, mostly found in old Indian movies, dramas and Urdu literature.” It’s a barren view of the modern world isn’t it, or of modern India at least. Perhaps the standard can be refined to regard love as something less pejorative than a pure affliction (and by the way, I must get my hands on some of that Urdu literature). Here’s the distinction: “FLIRTING is the modern form of love; this disease came from Hollywood movies, new Indian movies, internet, mobile phones, and English literature.” Maybe that last one is intended to grudgingly acknowledge that there’s flirting in (say) Shakespeare’s work, which far predates mobile phones and the other sources cited. Perhaps this is one of those areas where the vision of a one-size-fits-all global standard may be severely challenged.

Moving on: “MARRIAGE is a long term liability as a result of PAST events that is expected to be settled by increasing the population, decreasing the health and money.” If you ask me, that’s not describing a point of settlement so much as, perhaps, the point when the obligation becomes more easily, albeit tragically, measurable (or at least, when it starts to turn your hair grey).

On recognition, it states: “A girl shall be recognized as a girl friend if, and only if: (a) it is probable that future physical benefits associated with the girlfriend will flow to the boyfriend, (b) no possibility of GF becoming a long term liability (wife) exists and (c) the expenditures to be incurred (e.g. in respect of gifts, cards etc.) can be measured reliably.” Based on my no doubt limited experience, these recognition criteria will seldom be met, and might result in recognizing certain rather peripheral relationships while leaving other more substantial ones off the balance sheet. Perhaps the project needs to be expanded to encompass a broader conceptual framework for relationship accounting: not just Accounting for Long-Time Partners but also Accounting for Parents, Accounting for Pals and Accounting for People You Don’t Really Like But Who Have Lots Of Useful Connections.

You’ll have to look up for yourself the requirements on determining the useful life (be prepared to wince a little), but these are the derecognition criteria: “1. at the end of the useful life of GF or flirting term whichever is earlier, 2. when no future benefits are expected from her or her disposal or 3. when remote possibility of GF becoming long term liability occurs.” The firms will no doubt rack up big bills analyzing the distinction between 1 and 2. Disclosures include “total number of GFs” (by class!) which at least shows you the writer has ambition. They also require disclosing “any ‘special’ benefits that may have been derived from the GF,” which I might have thought could be excluded from public disclosure on the basis of extreme potential harm to the disclosing BF’s health, once the GF finds out what he’s been saying about her. And what about the proposal to disclose “email address, residential address and mobile no. of each GF.” Hey, who are the anticipated readers for these disclosures anyway?!

The standard cries out for application guidance, addressing the GF-related implications of such matters as componentization, treatment in the cash flow statement (oh wait, I guess that one’s easy, just one big outflow), hedge accounting, joint ventures, foreign exchange, constructive obligations, and impairment. Still, it’s a good first step. Now, who put this holly in my drink?…

The opinions expressed, on this occasion, are not necessarily even those of the author, let alone those of anyone else….

(See here for a December 2018 update to this important topic)