verification client sent me a note recently, stating that they had historically used Modified Dietz for their returns, but will be switching to "true daily." He asked if this was permitted or if they would have to restate their history. This also raises the question about multiple methods being used simultaneously.
The answer to both is "yes, it's permitted." As long as the returns that are employed meet the GIPS requirements, you can switch. Of course we wouldn't expect that you would be switching in order to obtain a higher return, meaning that if we saw a lot of switching, back-and-forth, then we'd object, but this isn't what is happening here.
And, it's not uncommon for GIPS compliant firms to have accounts in the same composite whose returns are calculated differently. This can happen, for example, if you have a mutual fund (that has daily returns) along with a separate account (which might use Modified Dietz).
Your calculation policy document should explain the returns employed, historically and currently.