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 March, 2006 - 31 October, 2012Categories: Trade-Date AccountingSource: GIPS Handbook, 2nd Edition
Mutual funds in the US function on a T+1 schedule. Therefore, if a bond is purchased on January 31, it is not included in the NAV calculation for January 31. It is included in the NAV calculation February 1. Does the requirement for trade-date accounting mean that firms managing mutual funds must account for the funds in their own portfolio management software systems in order to base performance on trade-date net assets as opposed to NAV’s (T+1) in order to remain compliant with the GIPS standards?
A fund recognizing the bond purchase in the portfolio at trade date + 1 day will satisfy the requirements of the GIPS standards. For the purposes of compliance with the GIPS standards, portfolios are considered to satisfy the trade-date accounting requirement provided that transactions are recorded and recognized consistently and within normal market practice–typically, a period between trade date and up to three days after trade date (T+3).
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