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 January, 2006 - 31 December, 2019

Categories: Real Estate

Source: Interpretive Guidance for Real Estate

Where do real estate mortgages fit within the GIPS standards?
For the purpose of performance reporting, real estate mortgages with fixed or variable interest rates are considered fixed-income securities. Therefore, the core sections of the GIPS standards are applicable. Participation and convertible mortgages (i.e., hybrid mortgages) are considered real estate investments. In addition, component returns should be allocated as follows:
- Basic cash interest (current receivable): allocate to income return component.
- Contingent interest (current receivable): allocate to income return component.
- Basic accrued interest (deferred): allocate to appreciation return component.
- Additional contingent interest (deferred; payable at maturity, prepayment, or sale): allocate to appreciation return component.
Therefore, if the return is currently payable from operations, allocate to the income return. All other sources of return that are deferred or realizable in the future should be allocated to the appreciation component.