Understanding the Essence of GIPS

The Global Investment Performance Standards (GIPS) are a set of ethical standards for investment performance reporting. They aim to promote fair representation and full disclosure of investment performance results, thereby enhancing the credibility of investment firms. The standards have several key principles governing how investment firms should report their performance. Understanding these key elements is crucial for compliance and transparency in the investment industry.

Which of the following statements best summarizes the essence of GIPS as they relate to performance reporting?