XML 20 R9.htm IDEA: XBRL DOCUMENT v3.8.0.1
Note 2 - Significant Accounting Policies
9 Months Ended
Sep. 30, 2017
Notes to Financial Statements  
Significant Accounting Policies [Text Block]
2
- Significant Accounting Policies
 
A.
Basis of Accounting
 
The following significant accounting policies are consistently followed by the Trust in the preparation of its financial statements in conformity with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
Certain statements and captions in the financial statements for the prior periods have been changed to conform to the current financial statement presentation.
 
B.
Gold Bullion
 
JPMorgan Chase Bank N.A., London branch (the “Custodian”), is responsible for the safekeeping of gold bullion owned by the Trust.
 
Fair value of the gold bullion held by the Trust is based on the price of gold determined in an auction hosted by ICE Benchmark Administration Limited (“IBA”) in the afternoon (London time), on each day that the London gold market is open for business, and announced by the London Bullion Market Association shortly thereafter (such price, the “LBMA Gold Price PM”). If there is
no
announced LBMA Gold Price PM on any day, the Trustee is authorized to use the most recently announced price of gold determined in an auction hosted by IBA in the morning (London time) of that day (such price, the “LBMA Gold Price AM”), unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate as a basis for evaluation.
 
Gain or loss on sales of gold bullion is calculated on a trade date basis using the average cost method.
 
The following tables summarize activity in gold bullion for the
three
months ended
September 30, 2017
and
2016:
 
Three Months Ended September 30, 2017
 
Ounces
   
Average
Cost
   
Fair
Value
   
Realized
Gain (Loss)
 
Beginning balance
   
6,762,892
    $
8,277,677,317
    $
8,401,202,679
    $
 
Gold bullion contributed
   
829,112
     
1,067,933,923
     
1,067,933,923
     
 
Gold bullion distributed
   
(239,388
)    
(293,375,991
)    
(307,829,659
)    
14,453,668
 
Gold bullion sold to pay expenses
   
(4,221
)    
(5,172,020
)    
(5,376,124
)    
204,104
 
Net realized gain
   
     
     
14,657,772
     
 
Net change in unrealized appreciation/depreciation
   
     
     
258,137,498
     
 
Ending balance
   
7,348,395
    $
9,047,063,229
    $
9,428,726,089
    $
14,657,772
 
    
Three Months Ended September 30, 2016
 
Ounces
   
Average
Cost
   
Fair
Value
   
Realized
Gain (Loss)
 
Beginning balance
   
6,692,964
    $
8,091,223,134
    $
8,839,732,130
    $
 
Gold bullion contributed
   
673,745
     
902,311,073
     
902,311,073
     
 
Gold bullion distributed
   
(74,677
)    
(91,045,362
)    
(97,703,025
)    
6,657,663
 
Gold bullion sold to pay expenses
   
(4,247
)    
(5,162,864
)    
(5,657,843
)    
494,979
 
Net realized gain
   
     
     
7,152,642
     
 
Net change in unrealized appreciation/depreciation
   
     
     
(7,738,711
)    
 
Ending balance
   
7,287,785
    $
8,897,325,981
    $
9,638,096,266
    $
7,152,642
 
 
The following tables summarize activity in gold bullion for the
nine
months ended
September 30, 2017
and
2016:
 
Nine Months Ended September 30, 2017
 
Ounces
   
A
verage
Cost
   
Fa
ir
Value
   
Realized
Gain (Loss)
 
Beginning balance
   
6,308,062
    $
7,706,923,343
    $
7,311,674,849
    $
 
Gold bullion contributed
   
1,634,973
     
2,067,477,206
     
2,067,477,206
     
 
Gold bullion distributed
   
(582,465
)    
(712,447,813
)    
(731,446,104
)    
18,998,291
 
Gold bullion sold to pay expenses
   
(12,175
)    
(14,889,507
)    
(15,136,183
)    
246,676
 
Net realized gain
   
     
     
19,244,967
     
 
Net change in unrealized appreciation/depreciation
   
     
     
776,911,354
     
 
Ending balance
   
7,348,395
    $
9,047,063,229
    $
9,428,726,089
    $
19,244,967
 
 
Nine Months Ended September 30, 2016
 
Ounces
   
Av
erage
Cost
   
F
air
Value
   
Re
alized
Gain (Loss)
 
Beginning balance
   
4,905,568
    $
5,910,175,908
    $
5,210,940,144
    $
 
Gold bullion contributed
   
2,854,595
     
3,555,013,884
     
3,555,013,884
     
 
Gold bullion distributed
   
(461,005
)    
(554,149,884
)    
(570,304,850
)    
16,154,966
 
Gold bullion sold to pay expenses
   
(11,373
)    
(13,713,927
)    
(14,197,999
)    
484,072
 
Net realized gain
   
     
     
16,639,038
     
 
Net change in unrealized appreciation/depreciation
   
     
     
1,440,006,049
     
 
Ending balance
   
7,287,785
    $
8,897,325,981
    $
9,638,096,266
    $
16,639,038
 
  
C.
Calculation of Net Asset Value
 
On each business day, as soon as practicable after
4:00
p.m. (New York time), the net asset value of the Trust is obtained by subtracting all accrued fees, expenses and other liabilities of the Trust from the fair value of the gold and other assets held by the Trust. The Trustee computes the net asset value per Share by dividing the net asset value of the Trust by the number of Shares outstanding on the date the computation is made.
  
D.
Offering of the Shares
 
Trust Shares are issued and redeemed continuously in aggregations of
50,000
Shares in exchange for gold bullion rather than cash. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. The Trust only transacts with registered broker-dealers that are eligible to settle securities transactions through the book-entry facilities of the Depository Trust Company and that have entered into a contractual arrangement with the Trustee and the Sponsor governing, among other matters, the creation and redemption of Shares (such broker-dealers, the “Authorized Participants”). Holders of Shares of the Trust
may
redeem their Shares at any time acting through an Authorized Participant and in the prescribed aggregations of
50,000
Shares;
provided
, that redemptions of Shares
may
be suspended during any period while regular trading on NYSE Arca, Inc. (“NYSE Arca”) is suspended or restricted, or in which an emergency exists as a result of which delivery, disposal or evaluation of gold is
not
reasonably practicable.
 
The per Share amount of gold exchanged for a purchase or redemption represents the per Share amount of gold held by the Trust, after giving effect to its liabilities. 
 
When
gold bullion is exchanged in settlement of a redemption, it is considered a sale of gold bullion for accounting purposes.
 
E.
Federal Income Taxes
 
The Trust is treated as a grantor trust for federal income tax purposes and, therefore,
no
provision for federal income taxes is required. Any interest, expenses, gains and losses are passed through to the holders of Shares of the Trust.
 
The Sponsor has reviewed the tax positions as of
September 30, 2017
and has determined that
no
provision for income tax is required in the Tru
st’s financial statements.