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: Assimilating Assets

Source: GIPS Handbook, 3rd Edition

Firm B acquires another firm. The amount of total firm assets and composite assets in each of Firm B’s composites increases significantly after the purchase. Should the firm make any disclosures regarding these events?

The GIPS standards require that firms disclose any significant events within the firm that would help prospective clients interpret the compliant presentation. An acquisition of a new entity would likely qualify as a significant event because many aspects of the firm’s management, operations, investment processes, and staffing may change. It must be disclosed in a compliant presentation if it is determined that the acquisition is a significant event.

Sample Disclosure:
“Firm B acquired Firm X on 1 June 2000. As a result, Firm B’s total firm assets were greatly increased.”

Please also see original Q&A