Q21 in CFA book: It says that 10 yrs of GIPS compliant performance is enough. But are they not supposed to present the return for all years?? can the company just present 10 yrs gips compliant perf and not report the prior years if such a record exist? Can some one explain the difference in cash allocation for carve outs that is required now Vs the one that will be needed in 2010. It states that firsm must not include carveout unless it is actgually managed with its own cash balance. How is it different from stating that cash must be allocated to the carveout(as is the case now) There is a reading on After tax return methodology. problem 27 explains it. Is it part of the LOS? can someone confirm. thanks
The company may link prior non-compliance performance, but indicates the reason. In my understanding, after 2010, carve-out is not allowed.
if you’ve existed for 15 years, you only have to present the last 10 years.
Provision 5 A.1b states ’ Annual return for all the years’ what does it mean then?
you can present more than ten years but you dont have to…
krishna1 Wrote: ------------------------------------------------------- > Provision 5 A.1b states ’ Annual return for all > the years’ what does it mean then? It means they must be annual returns, not annualized. You can’t do partial presentation. There must be a full year’s presentation to qualify. The requirement is for a minimum of five years or since inception of the firm or composite if in existence for less than five years. Once the five year minimum is achieved, the firm must add one year of performance presentation until 10 years at a minimum. They could present more if wanted, but at a minimum, once in existence for 10 years they must present a 10 year rolling presentation.
Your explanation that “It means they must be annual returns, not annualized. You can’t do partial presentation. There must be a full year’s presentation to qualify” makes sense. But still their wording is awful. I understood the next paragraph about 5 yr 10 yr stuff. can anyone take a look at the other two quesitons?
once you get to ten, only need last 10. What strikershank said.
Can some one confirm if 'After tax methodology" is part of LOS?
another thing - you don’t have to show GIPS compliant history before year 2000. (no gips then - good days, good days!) but say, you are a young firm started in 1998, its 2003 now … do you show 5 years since inception or show since 2000
“but say, you are a young firm started in 1998, its 2003 now … do you show 5 years since inception or show since 2000” fortunately its 2008 now so this is not an issue
Bips you have to show since 1998. You must show a minimum of 5 years to start with unless your inception is less than 5 years.
thanks. btw, i checked one of the ethics problem we were discussing earlier… you were right - if beneficial ownership then you can’t trade on that account till all the other trades are over… rest of the family members u treat as normal clients.
No one has yet answered me on 'After tax methodology" as to whether it is part ofthe syllabus. BW?? CSK??
It could be…I wouldnt worry about it.
All I know about after tax returns is that its is not required under GIPS. However, if you do choose to present after-tax returns, you should do so for all composites and use the highest applicable tax rate to calculate.
Regarding non-compliant reported performance - it can be shown only if non-compliant performance is prior to 2000? What if the company has 5 years of compliant performance (2002-2007) and two years of non-compliant (2001-2002), can it show 2001-2002 with appropriate disclosures?
no. this cannot be done.