ok, don’t shoot me for asking this. ''If a firm is in existance for say last 15 years and wants to present its GIPS compliant results. How many years it has to start with ? 1) Previous 5 years and then add 1 year each for next 5 years or 2) Previous 10 years ? ‘’ I am bit confused with the wordings of this standard.
10 years of performance if it has it, lets say 1998 to 2008 calendar year performance. 1990 to 2000 stuff does not have to be GIPS compliant but have to footnote why its not.
thanks BiPolarBoyBoston. That pretty much clears my doubt.
what if it only has 4 years of data and cant get anymore. Can it be GIPS compliant? Would it disclose its 2003 data is non-compliant? Or can it not use that?
^Since the firm exists for 15 years, It can’t get away by just showing 4 years of data.
CFAdreams Wrote: ------------------------------------------------------- > what if it only has 4 years of data and cant get > anymore. Can it be GIPS compliant? > > Would it disclose its 2003 data is non-compliant? > Or can it not use that? thats fine if it only has 4 years worth of data, have to show since inception returns and still be GIPS compliant 2003 data has to be GIPS compliant if u want to use it. only data before Jan 1st 2000 can be non-gips compliant and linked to post Jan 1st 2000 data only if its disclosed how its not compliant
sorry conflicting results… i need a tie-breaker
if the composite only has 4 years worth of data (compliant and non-compliant data) while the firm has been around for 15 years you can still show 4 years worth of data for the composite and be GIPS compliant.
Standard 5.A.1a says that the firm must present AT LEAST 5 years of compliant history and every year going forward so that the firm eventually has at least 10 years of compliant history. The firm in this case would not need to present GIPS compliant history for the past 15 years in order to be compliant. It would only need to present 5 years of compliant history. A firm that has less than 5 years of existence would be allowed to present less than 5 years of compliant history and would beed to add additional years up to 10yrs.
It is true that if your company has been in existence for, say, 15 years, and you want to claim compliance to GIPS, you are required to initially show 5 years of historical performance (No cherry picking! if you can show more, then great! but you don’t have to) … and then keep linking each new year’s performance to add to a total of 10 years… after that, you can show more than 10 years of performance, but you are only required to show the latest 10 years…
Still don’t get it.
If a company has 15 years of history and wants to compliant GIPS they must present last 5 years, right? They don’t need to present last 10 years-.
As far as I understood it:
You can start with showing 5 years of GIPS-compliant performance presentations, it doesn’t matter if the company is 5 or 250 years old, you just need 5 years to initially claim GIPS compliance. Each year after you claimed compliance, you must add another year of compliant presentation until at least 10 years are shown. Then, you could either add more compliant years or show the 10 most recent years (rolling window).
You might add earlier years if those are GIPS compliant as well (e.g. start with 8 years because you didn’t claimed GIPS compliance before). You also might add earlier years that are not compliant but only if those years are pre 2000 and if you disclose the conflicts with GIPS.
I hope this helps… Good luck this week!
Previous 5 years and then add 1 year each for next 5 years. That’s what I was taught.
1 Like