The Dates in GIPS are probably more important than we thought…GIPS is an “actively managed” standards…Let’s start. 2011/1/1: (fair value and standard deviation) - The effective date for the 2010 edition of the GIPS standards - Total firm assets must be aggregate FAIR VALUE of all assets under management. - All portfolios must be valued in FAIR VALUE and the GIPS Valuation Principles. - Disclose if the composite’s VALUATION HIERARCHY materially diff from recommendation. - Disclose and describe any known material diff in EXCHANGE RATES or valuation sources - Disclose the use of Subjective Unobservable Inputs - Disclose 3-year annualized STANDARD DEVIATION (monthly) of composite/benchmark; - Or, an appropriate 3-year risk measure for composite/benchmark. Same periodicity. - RE: Separate income returns and capital returns (geometrically linked). - RE: Disclose material diff between external valuation and valuation in reporting. - RE(closed-end funds): when initial period < 1-year, present the non-annualized NET-OF-FEES SI-IRR through the initial annual period end. - PE: Calculate SI-IRR by using daily cash flows. - PE: when the initial period < 1-year, present the non-annualized NET-OF-FEES and GROSS-OF-FEES SI-IRR through the initial annual period end. - PE: For FUND OF FUNDS: % in DIRECT INVESTMENTS(NOT in fund investment vehicles). Please add more.
2010: (Cash flow, Composite and Carve-out) - value portfolios on the date of large cash flows. - value portfolio at Month end or last business-day of the month. - calculate composite returns at least Monthly. - carve-out not included unless it is Managed separately with its own cash balance. - prior to 2010, disclose if any portfolios not valued at Month-end/last b-day of month. - prior to 2010, disclose the policy used to allocate cash to carve-outs. - RE: value portfolios as of each Quarter end or last business day of each quarter.
When I look at this, I realize the trade off of memorizing all of this for a few points on an item set is not worth it. Needless to say, I just go with - if it mentions current standards or 2011, go with what’s FAIR and in the interest of full disclosure. How many questions can they ask on anything outdated? That’s where I stand on GIPS.
i concur - i might ‘punt’ GIPS and concentrate on other topics
Agreed. I have not seen a question testing a specific date…It’s just diff way to study it. For example, the following requirements are related. - value portfolio at Month end or last business-day of the month. - calculate composite returns at least Monthly. - Disclose 3-year annualized STANDARD DEVIATION (monthly) of composite/benchmark;
mp2438 Wrote: ------------------------------------------------------- > When I look at this, I realize the trade off of > memorizing all of this for a few points on an item > set is not worth it. > > Needless to say, I just go with - if it mentions > current standards or 2011, go with what’s FAIR and > in the interest of full disclosure. How many > questions can they ask on anything outdated? > That’s where I stand on GIPS. Agreed. Way too much to memorize for such a small portion. I’m going to just hit up the Q-Bank and do as many questions as possible.
Just curious, GIPS has never asked the firms to retroactively apply these new requirements to restate the performance, right?
they do state there that retroactive application SHOULD NOT BE DONE! since someone could use a retroactive application to make performance better than what it actually was.
Thanks, CP. ---------------------------------------------------- GIPS FACTS: Fair value(2011) Accrual Accounting(as always) Cash Flow, Carve-out(2010) Trade-date Accounting(2005) Standard Deviation(2011) ---------------------------------------------------- Effective Dates(continued) 2006: * composite must have consistent b/e annual valuation dates; * composite returns at least quarterly. * disclose the use of sub-advisor and periods. * [2006-2011?] the percentage of carve-out in composite if any. 2005: * use trade date accounting * [2005-2010] calculate portfolio returns adjusting for daily-weighted EXTERNAL CF.