Firms with records or performance calculations for periods prior to the applicable effective date(s) that are not in conformance with the AIMR Performance
Presentation Standards can still claim compliance with the standards if certain conditions are met. Which of the following is an option available to such a firm?
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A. B. C. D. E.B
Firms with records or performance calculations for periods prior to the applicable effective date(s) that are not in conformance with the Standards can choose any of the options listed.
The correct answer is D. The firm can use its nonconforming historical performance and disclose specifically when and how the performance is not in compliance.
The question refers to firms that have records or performance calculations that do not conform to the AIMR (Association for Investment Management and Research) Performance Presentation Standards for periods prior to the applicable effective date(s). In such cases, the firms still have options to claim compliance with the standards if certain conditions are met.
Option A states that none of the answers are available to the firm, which is incorrect.
Option B states that all of the answers are available to the firm, which is also incorrect.
Option C mentions the possibility of restating historical performance in accordance with the Relaxed Retroactive Standards for retroactive compliance. However, this option is not available to firms with nonconforming historical performance. The Relaxed Retroactive Standards are designed for situations where the firm's noncompliance is due to the unavailability of certain historical data or compliance measures. It allows for a more flexible approach in these cases, but it does not apply to firms with nonconforming historical performance.
Option E suggests restating historical performance numbers in accordance with the Standards. This option is also not applicable in this case because the firm's historical performance does not conform to the AIMR Performance Presentation Standards.
Option D is the correct answer. It states that the firm can use its nonconforming historical performance but must disclose specifically when and how the performance is not in compliance with the standards. This means that the firm can still utilize its existing historical performance data, even if it does not adhere to the standards, but it must provide clear and transparent disclosure regarding the areas in which it deviates from the standards. This ensures that investors and other stakeholders are aware of the noncompliance and can make informed decisions based on the disclosed information.
In summary, if a firm has nonconforming historical performance, it can claim compliance with the AIMR Performance Presentation Standards by using its existing data and disclosing the specific areas where the performance does not meet the standards. This promotes transparency and allows stakeholders to evaluate the firm's performance accurately, despite the nonconformance.