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 June, 2008 - 31 December, 2013Categories: Error CorrectionSource: Guidance Statement on Error Correction
We realized that an account had been included in the wrong composite for the past five years. We have corrected the account’s composite assignment and recalculated the composite’s returns and related disclosures. We present both gross and net returns in our compliant presentation. Although the annual composite gross returns changed by an immaterial amount for each year, the composite’s net annual returns changed quite a bit because this account was a non-fee-paying account. Does this qualify as an error?
Firms must have written policies and procedures for how they handle errors in compliant presentations. Assuming the change in the composite’s net annual returns is considered material based on the firm’s definition of materiality, the firm must treat this as a correction of an error and follow the firm’s previously established error correction policies and procedures.
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