Interesting! So, it's sort of breaking down any material to the point where it can't be divided any more, am I correct? Because in my world, the smallest unit of matter is called an atom, and atoms comprise everything in the world.

Of course, sticking to the atom theory, the reason why you can't change another element into another is because of the atoms- each atom has it's own number of electrons. So technically, gold can never be turned into silver, for example.
But...then how would you change iron into gold, then?

The Philosopher's Stone doesn't exist in my world and probably never will. However, that doesn't stop anyone from writing stories about it.