GIPS question

A global financial service firm, ABC corp has subsidiaries in many contries.


If the ABC corp has dicided not to implement the GIPS standard, does one of its subsidiary - ABC vietnam corp become GIPS compliant ?


If one of ABC corp subsidiaries - ABC Lao corp does not implement GIPS, does ABC corp to ?


not sure. may be not

these sentence fragments are throwing me off

Q1, It depends on if the subsidiary is independently managed or not . If it holds out to its own clients that it is independent and managed substantially by its own managers using their own strategies with full discretionary control , has independent marketing capability , then it is really a seperate firm by GIPS definition and can define its own firm boundaries. Sounds a bit far fetched though.

Q2. This is more tricky , probably also far fetched. If the subsidiary does not follow GIPS , then ABC cannot consolidate the results from the subsidiaries portfolios into its composites. The firm cannot include the subsidiary into its boundary definition , has to exclude the assets of the subsidiary , and generally treat them as a pariah for everything GIPS. sounds quite far-etched.

This come from EoC Q1 R43

Q1 the key is the that firm must be defined as a distinct business entity…then if the subsidiary is a dis…it ok

Q2 come to my mind when i face with the 1st one…i have no answer…sorry