GIPS - 5Y to 10Y

Under the GIPS standards, we must present at least 5 years of GIPS compliant performance data, then gradually increase this to up to 10 years. Question is after the first 5 years of GIPS compliant data, must you increase this to up to: a) 10 historical years (including these first 5 years) b) 5 future years (plus these first 5 years to make it 10 years in total) c) a mixture of historical and future years as long as it adds up to 10 years in total This is a genuine question I have - not from any MC test!

my understanding is B

I’m not clear on what you mean by future years. First you have the 5 years of compliant data, then each year thereafter, another year will be added. So after the first year of claiming GIPS compliant, the firm will have 6 years of compliant data. After 2 years, the firm will have 7 years of compliant data, and so on until 10 years of data is compliant.

If firm claims GIPS compliance since 2000, and we are now in 2010, firm only needs to show GIPS compliant data from 2005-2009 inclusive (5 years). Question is by 2012 for example, must they show 2003-2012 (10 years), or just 2005-2012 (8 years then 2013 and 2014 in the future to make it 10 years)?

After presenting 5 years, the firm must present additional annual performance up to ten years. That is, add one more year every year after the 5 years have been presented. After 5 years of claiming compliance, the firm will automatically have 10 years of GIPS compliant performance record

Another hypothetical - your composite/firm was founded in 2002. It is now 2010, and you want to become GIPS compliant. You don’t have very good accounting records in 2004. Can I just show performance from 2005-2010 (6 years) and claim GIPS compliance?

Can you start with 6 years of GIPS compliant data, instead of starting with 5 years? The GIPS standards say at least 5 years, right?

yes, but you can also show <5 years if the firm has not been in existance for that long. i’ve seen <1 year gips compliant firms.

My point is if they have been existence for more than 10 years, but only show 6 years, is that allowed?

I believe (not 100%) if they’ve been GIPS compliant for all 10 years, then yes, they must show 10 years.

No, but I thought it was AT LEAST 5 years. If they were GIPS compliant for 20 years, they only show 5 years right? Am getting confused now!!!

if they’ve been GIPS compliant for 20 years, they can show the latest 10 years worth of performance record… no less… however, if they have only been compliant 3 years - 3 years is enough… if they’ve been compliant 8 years - show 8 years… by they way, is it true or false - “you have only one year to make your firm GIPS compliant”

If you are gips compliant and you acquire a non-gips compliant firm, then TRUE - you have one year to make the firm gips compliant.