Q: My fund/account is already in compliance with U.S. generally accepted accounting principals (GAAP). Why do I need Reporting Standards compliance too?
A: The Reporting Standards are a multi-discipliary set of reporting standards for portfolio management, performance measurement, asset managements, financial/ accounting and valuation for private institutional real estate investment accounts. These reporting standards depend upon, supplement, and clarify, but do not contradict standards established by U.S. GAAP, the CFA Institute's Global Investment Performance Standards (GIPS®) and the Standards. Established Foundational Standards do not specifically address institutional real estate investment and investor reporting issues leading to inconsistency and lack of transparency.
Q: We manage real estate assets for our parent company, but do not issue a formal report. Is this activity subject to Reporting Standards?
A: No. The Reporting Standards apply to Account (commingled fund and single investor investment account) Reports. Since you do not issue reports, the Reporting Standards do not apply.
Q: As an advisor I understand we are not required to externally appraise our properties annually if we have a client agreement that states otherwise (once every 36 months), however can the client also claim Reporting Standards compliance?
A: If you have a client agreement that states for other than annual external appraisals and provided that the agreements requires external appraisals no less frequently than every 36 months, then provided that all other required elements are presented, the report can indicate that it is a Reporting Standards compliant report. Reporting Standards compliance is measured on a fund/ account by fund/ account basis. The report is compliant. The client can state that it requires reports from its managers to be prepared in compliance with Reporting Standards.