Bob Carter, president of Boswell, invites Abbott and several other analysts to visit his company and offers to pay her transportation and lodging. Abbott declines Carter’s offer but, while visiting the company, accepts a gift from Carter valued at $75. Abbott fails to disclose the gift to her supervisor at Capital when she returns.

Is this a violation of Standard 1(B)? If no, then what is the criteria to judge the value of the gift accepted by the employees from their clients?

If it is less than $100, he need not disclose. Other can chime in to confirm. No std has been violated.

thank you for reverting back. Can you please site the source of this information? I am not sure if Schweser has something like this where it says that $100 is reasonable and need not be disclosed.

Years ago there was a threshold of $100, but that’s long since been abandoned. The question is whether the value of the gift is sufficient to affect the analyst’s independence and objectivity.

I’d say that $75 isn’t, but there isn’t a set value that separates “OK” from “not OK”.

More importantly, on the real exam they won’t give you a situation where the gift will be close to the threshold and you have to determine on which side it falls; that’s not the point of the exam. The point of the exam is to establish whether you know what to do when it clearly falls on one side, or clearly falls on the other side. Expect on the exam to see a gift that is either a baseball cap, or a week’s vacation (all expenses paid) in Aspen.

yes, the CFAI texts have excluded the $100 limit, on their recent examples and exam questions, they will make it very obvious that the gift has little to no value by explicitly mentioning “small token” or company souvenirs, etc.

Company Company souvenirs nned not be disclosed, right? @ S2000magician: Thank you. I thought 100 was the threshold, I read it in cfai texts…“best practice would be to” - as in they they don’t say that 100 is a threshold, but they’ve mentioned the number-100

thank you for the clarification sir.

thank you mam for adding up.

thank you and all the best.

In the exam, do you have to worry about if the standard in the question “1(B)” in this case is correct? Or you just need to worry about if it violates “a” standard?

What I mean is, do I have to rememberr standard numbers and letters?

You _ do not _ need to memorize the numbers of the standards. They will give you the numbers and the names of the standards in the answer choices.


My pleasure.

Do company souveneirs have to be disclosed or not?