CFA Level 1: Example of Assets to Which Standards Cannot be Applied

Assets to Which Standards Cannot be Applied

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Question

According to the AIMR-PPS, assets to which the Standards cannot be applied are not to be considered by firms when claiming compliance with the Standards.

Which of the following is an example of an asset to which the Standards cannot be applied?

Answers

Explanations

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A. B. C. D.

A

Traditional GIC portfolios provide stable results that are not based on a mark-to-market valuation. The valuation of the traditional GIC is based on book value, not current market value, which are the valuations required by the total return calculation and reporting requirements of the Standards. GIC assets would be reported separately.

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