i read GIPS from Schweser, just going through study pack at end of book 5 on GIPS and found some new points: 1. Countries encouraged to accept GIPS and translate where necessary [translation of GIPS (TG)] 2. When conflict with TG, English version of GIPS is controlling 3. Total firm assets include market value of all assets (including discretionary, non-discretionary, fee paying and non fee paying) 4. List discontinued composites for 5 years 5. wrt verification, encouraged disclosure is “[name of firm] has been verified for the periods [dates] by [verifier]. A copy of the verification report is availbale upon request.” more extra credits are totally welcome.
method of dispersion only firms get verification, not composites or funds no exceptions trade date accounting, not cash basis they’re going to throw a curveball question on definition of firm total assets is everything in discretion usually have 1 year to bring a non-gips compliant firm into compliance after acquisition do not switch composites unless you want your balls cut off
Wait you guys contradicted yourselves: Is total assets=all discretionary assets (as CPierce says) or market value of all assets (including discretionary, non-discretionary, fee paying and non fee paying) as level3aspirant says?
CPierce Wrote: ------------------------------------------------------- > trade date accounting, not cash basis It’s actually trade date accounting vs. settlement date accounting, and accrual accounting vs. cash accounting.
I’m not looking it up right now, but it’s got to be discretionary asset. If you have no control over the money, then why are you counting it in your composites? and sorry about the trade date/settlement and accrual/cash. you are right.
CPierce Wrote: ------------------------------------------------------- > I’m not looking it up right now, but it’s got to > be discretionary asset. If you have no control > over the money, then why are you counting it in > your composites? That’s correct; also, you need to remove any portfolios that were managed by subadvisors from your total assets beginning _____ (trying to look it up right now).
"Total firm assets include market value of all assets (including discretionary, non-discretionary, fee paying and non fee paying) " ^Is this correct? I think non-discretionary should not be a part of TFA?
Quoting from GIPS 2010 handbook (Source: http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2010.n5.1) For periods beginning on or after 1 January 2011, TOTAL FIRM ASSETS MUST be the aggregate FAIR VALUE of all discretionary and non-discretionary assets managed by the FIRM. This includes both fee-paying and non-fee-paying PORTFOLIOS. TOTAL FIRM ASSETS MUST include assets assigned to a SUB-ADVISOR provided the FIRM has discretion over the selection of the SUB-ADVISOR. So i believe only the portion assigned to sub-advisor can be left out. all other portfolios are included in calculatinf total firm assets.
“TOTAL FIRM ASSETS MUST be the aggregate FAIR VALUE of all discretionary and non-discretionary assets managed by the FIRM.” This is accurate. Includes “NON-discretionary”. Also very important to pay attention to Dispersion measure. This is not how the return dispersion among COMPOSITES, it should be INTERNAL dispersion. i.e. the dispersion among portfolios within the composite.
thanks guys.
Straight copy from CFAI volumes: - For periods beginning 1 January 2010, firms must value portfolios on the date of all large external cash flows - Total return calculations must include returns from cash and cash equivalents and must be reduced by actual trading expenses - Terminated portfolios must be included in the historical record of the appropriate composite up to the last full measurement period they were under management -When a single asset class (e.g., equities) is carved out of a multiple asset class portfolio (e.g., a balanced account invested in equity and fixed-income securities) and the returns are presented as part of a single-asset-class composite, cash must be allocated to the carve-out returns in a timely and consistent manner. Beginning 1 January 2010, carve-out returns are not permitted to be included in single asset class composite returns unless the carved-out segment is actually managed separately with its own cash balance.
so can we conclude following: 1. before 1 jan 2010 - Total assets to include only discretinary, fee-paying and non-fee paying portfolios. 2. Beg 1 jan 2010 - Total assets to include discretinary, non-discretionaly, fee-paying and non-fee paying portfolios.
WRONG . “2. Beg 1 jan 2010 - Total assets to include discretinary, non-discretionaly, fee-paying and non-fee paying portfolios.” As far as I know, and I’m pretty sure, that we needed to INCLUDE " non-discretionary" even for the period before Jan 1, 2010 and this is same after that period.
So it’s always - Dis, non-Div, fee, non-fee right?
+1 LaGrandeFinale Wrote: ------------------------------------------------------- > So it’s always - Dis, non-Dis, fee, non-fee right?