Q & A Database

The GIPS Standards Q&A database contains questions and answers (Q&As) on various searchable topics that provide additional interpretation on an issue. Q&As are considered to be authoritative guidance and must be followed in order to claim compliance with the GIPS standards.

Content from prior Q&As was included in the GIPS Standards Handbook as much as possible and many Q&As were archived. Change the Status drop-down filter to "Archived" to see the archived Q&As.

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Archived

Effective: 1 November, 2012 - 31 December, 2019

Categories: Cash Flow

Source: GIPS Handbook, 3rd Edition

What factors should we consider when determining what is a large cash flow?

A large cash flow is the level at which the firm determines that an external cash flow may distort performance if the portfolio is not valued. The firm must determine in advance (i.e., on an ex-ante basis) what is considered to be a large cash flow on a composite-specific basis. Firms must define the amount in terms of the value of cash/asset flow or in terms of a percentage of the portfolio assets or the composite assets. The determination of the large cash flow level may be influenced by a variety of factors, such as the nature of the strategy, historical and expected volatility of the strategy, and the targeted cash level of the strategy.

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