ABC corp established since 1986. The firm become GIPS-compliant on 1/1/2001 and prepared composite performance presentation for the period 1996-2000 period (in compliance with GIPS).
Assum now is 2013…
Because of poor performance for period prior 2001, the company drops figures for the period (1996-2001) from their current presentation (just show performance start from 2002 to 2012).
Does this comply with GIPS?
I think yes
GIPS requires atleast 5 years of performance (or since inception if firm or composite has been in existence less than 5 years) After 5 years, additional annual performace upto minimum of 10 years.
Means atleast 10 years of performance has to be displayed if the firm is in existence for than that.
Now is 2013…so 10 years requirement are met 2002-12…they can drop 2001
Yes for presentation…but that performance will still be in their since inception track record number right?? So they aren’t really fooling anyone with that, but maybe their 1-3-5-10 year numbers will look great
it sounds ok, but dropping return periods because of poor performance does not exactly meet the spirit of fair representation and full disclosure.
You all correct, the answer is yes though they recommend to keep all 96-12