GIPS compliance? 5 7 10 years? question, company, around, years

Elliotbay

Just a quick question. This popped up on the June test, when you have GIPS and your company has been around for 7 years you have to use 7 years of compliant data or just 5? When it's been around for 12, would you need 10 or 12?

tHANKS

koba

Thank you sbmarti2.

sgupta0827

revenant Wrote:
-------------------------------------------------------
>
> Scenario 1
>
> If a firm has been in business for 3 years, it has
> to use 3 years of data to be GIPS compliant. And
> it has to report every year from the 4th year
> onwards till the 10th year. Once at 11th year, it
> will report from 2nd year to 11th year. Once at
> 12th year, it will report from 3rd year to 12th
> year.
>
> Scenario 2
>
> If a firm has been GIPS compliant for 7 years and
> been around for 10 years, it has to report 10
> years? (7 plus the initial 3)
>
> Are both of the scenario correct?
>
> Thanks.

Anyone?

marsilni

Both scenario's are correct.

Scenario one- You are never required to report more than 10 years, so once they are reporting that, they can choose to report since inception, or the most recent 10 years they have.

Scenario two- they have only three years to report at inception, but they have to keep reporting since inception until 10 years has passed, then they can report only the most recent 10 years.

ramzes

When becoming GIPS compliant, you need five years, or since inception if you've been in business less than five. Once you are compliant, you need to continue to report the original five years, plus every additional year, until you report 10 years in total. (So the year after you start complying, you'll report 6, the year after that, 7, etc.). Once you're reporting 10 years, you don't need to report any more. So when you have an 11th year to report, you can stop reporting the first year, etc.

It's hard to write out, but it's pretty simple once you grasp it.

ramdabom

sbmarti2 Wrote:
-------------------------------------------------------
> When becoming GIPS compliant, you need five years,
> or since inception if you've been in business less
> than five. Once you are compliant, you need to
> continue to report the original five years, plus
> every additional year, until you report 10 years
> in total. (So the year after you start complying,
> you'll report 6, the year after that, 7, etc.).
> Once you're reporting 10 years, you don't need to
> report any more. So when you have an 11th year to
> report, you can stop reporting the first year,
> etc.
>
> It's hard to write out, but it's pretty simple
> once you grasp it.

Scenario 1

If a firm has been in business for 3 years, it has to use 3 years of data to be GIPS compliant. And it has to report every year from the 4th year onwards till the 10th year. Once at 11th year, it will report from 2nd year to 11th year. Once at 12th year, it will report from 3rd year to 12th year.

Scenario 2

If a firm has been GIPS compliant for 7 years and been around for 10 years, it has to report 10 years? (7 plus the initial 3)

Are both of the scenario correct?

Thanks.

Siddimaula

Just 5 years of minimum data. However, if the company exist less than that then it's since inception. keelim is right that the firm is also obliged to collect the data in compliance with the GIPS for up to 10 years.

Bluetick1010

The answer was 10. They been GIPS compliant for seven years, but when they initially became compliant, they had to have five years then. Because 12 (5 + 7) is more than the required 10, 10 is all that is necessary.

The key point in this question is that the firm HAS BEEN GIPS compliant for seven years, not around for seven years.

amqata

I remember I chose 5 as the answer.

IF the firm has historical data of 12 years, it still could claim compliance of 5 years provided it explains the reason for the 7 non compliance data. Going forward, the firm is obliged to claim compliance up to 10 years. After 10 years, it's a moving quantuam of a decade. The firm does not need to show 12 years of compliance.