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 October, 2009 - 31 December, 2019Categories: Cash FlowSource: GIPS Executive Committee
The GIPS standards state that for periods beginning 1 January 2010, firms must value portfolios on the date of all large external cash flows. We presently assume all cash flows take place as of the beginning of the day and so the revaluation is done at the close of the business day prior to the large external cash flow. Does this mean our policy is no longer acceptable and we must revalue the portfolios with large external cash flows on the exact date of the cash flow for periods beginning 1 January 2010?
No, the change in the provision noted above would not require you to change your current policy for periods beginning 1 January 2010. The intent of the provision is to require firms to revalue portfolios at the time of all large external cash flows, and so revaluing portfolios as of the close of the business day prior to the large external cash flow will continue to be acceptable if cash flows are assumed to take place at the beginning of the day.