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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ArchivedEffective: 1 May, 2010 - 31 December, 2019Categories: ValuationSource: GIPS Executive Committee
For periods beginning on or after 1 January 2011, portfolios must be valued in accordance with the definition of fair value and the GIPS Valuation Principles in Chapter II. Our firm manages a stable value strategy which includes Guaranteed Investment Contracts (“GICs”). We believe it is most appropriate for GICs to be valued at cost/book value due to the nature of the investments. If we value GICs at cost/book value, will we be violating this requirement?
Firms must create a composite-specific valuation policy and establish procedures to determine the fair value of each investment. When following the composite-specific policies for valuing investments, firms might determine that fair value for GICs is equal to cost. However, firms must not simply assume an investment’s fair value is cost and must determine the fair value for all investments, including GICs, when valuing portfolios.