Wednesday, April 14, 2010

Principles Level: After-Tax Performance???

Hopefully the mental strains of preparing for the CIPM Principles Exam ***and*** getting ready for the I.R.S. tax man on April 15th is not too much for the Principles candidates out there!

I have received a couple of questions lately regarding the CIPM Principles curriculum and what one needs to know with respect to after-tax performance.

This post should also clarify the discussion on after-tax performance during our webinar yesterday.

The following Learning Outcome Statements (LOS) were dropped from the CIPM curriculum, effective in the Spring 2010 exam window:

  • Calculate anticipated tax rates
  • Calculate pre-liquidation returns, including adjustments for nondiscretionary realized taxes
  • Calculate the benefit of tax loss harvesting

Thus, calculation of after-tax returns is not required.

Having said that, the following LOS remain part of the curriculum (as part of Study Session II):

  • Explain the major issues surrounding after-tax performance measurement
  • Evaluate approaches to after-tax benchmark selection
  • Compare and contrast the pre-liquidation and mark-to-liquidation methods for calculating after-tax performance

This change was announced to the CIPM Prep Providers back in November 2009, and the details can also be found at following link:

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