I made a thread last year on GIPS, and I typically review these 3 sections in the final few weeks since they are largely memory based IMO. In the process of re-reviewing, I have come across some subtleties that I have forgotten since last year. I thought I would start an open list for people to comment on.
-For trade-date accounting there is a 3 day grace period - you can recognize the assets/liabilities associated with a transaction up to 3 days after the transaction and it still meets the definition of trade date accounting and not settlement accounting.
-Fair Value supersedes market value
-Firms have discretion over when to add new portfolios to a composite but must apply their policy consistently.
-Firms define what is a “large” cash flow requiring portfolio valuation on date of such occurances (post Jan 1 2010). “External” cashflow revaluation simply recommended (for some reason i thought the requirement was on all large AND external CF’s, not just large.
-Terminated portfolios are included up to the last full measurement period. However the nuance is that a firm may be given notice of termination prior to actual termination, and therefore they could be ordered to stop trading as of the notice day to prepare for outflows. The day of the notice, and corresponding loss of discretion then becomes the date that matters. Example - Firm receives notice on 4/19 that on 4/31 it will be terminated as manager and to cease trades until such time. This requires that the last full measurement period is through 3/31, not 4/31, since discretion was lost on 4/19.
-Modeled or simulated data is allowed to be shown in a presentation if it is labeled as such, and as a supplement, but cannot be within the composite (linking modeled to composite returns).
I will add more as I come across it, feel free to do the same yourselves.