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 June, 2010 - 31 December, 2019

Categories: Cash Flow

Source: GIPS Executive Committee

For periods beginning on or after 1 January 2010, firms must define the level of large cash flows for each composite used to determine when portfolios in that composite must be valued. Can we use the same large cash flow level for all our composites?

Yes, but only if it is appropriate for each composite. The large cash flow level must represent the level at which the firm determines that an external cash flow may distort performance if the portfolio is not valued. It may be possible that all of a firm’s composites have the same level of large cash flows; however the appropriate level must be determined for each composite. Firms must define the large cash flow level for each composite in terms of the value of the cash/asset flow or in terms of a percentage of portfolio assets or composite assets. Although it is possible for all of a firm’s composites to have the same large cash flow level, a firm must not simply establish this level on a firm-wide basis without considering whether the level is appropriate for each composite.