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

The GIPS standards state that the value of a real estate portfolio must be reviewed at least once every 12 months. Is this an internal review and if so, what does it entail?

The 12-month valuation requirement for real estate can be satisfied with an internal review or external valuation. In an internal review, the valuation is determined internally, by the firm’s management. The firm could determine that relying on values reported in annual reports generally satisfies the current 12-month review requirement because the issuance of the annual report should include a review of the real estate portfolio, a review of net asset value for financial and performance purposes, and review and disclosure of any factors that may result in a material change to net asset value. However, beginning 1 January 2008, real estate investments must be valued at least quarterly.
An external appraisal is not required every 12 months; the minimum requirement is at least once every 36 months. The frequency of independent external appraisals must be disclosed.