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 March, 2006 - 31 December, 2019

Categories: Fixed Income

Source: GIPS Handbook, 2nd Edition

Should we exclude local bank certificates of deposit (CDs) from total firm assets and performance calculations since they cannot be priced on a market value basis (i.e., these local bank non-brokered CDs are currently priced at cost)?

Local bank CDs, if they are held as assets in actual, fee-paying discretionary portfolios defined within the firm, must be included in all appropriate calculations. The value for which the bank would redeem the CD on the valuation date (principal), which would include interest earned to date, would be the market value for the asset (a reasonable estimate of the current value of assets if they were sold on that date to a willing buyer). If the bank has a penalty for early withdrawal of funds, the penalty would not be included in the valuation, unless the funds were actually withdrawn and the penalty incurred.