Note 2 - Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

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.

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 per fine troy ounce of gold determined in an electronic auction hosted by ICE Benchmark Administration (“IBA”) that begins at

3:00

p.m. (London time) and published shortly thereafter, on each day that the London gold market is open for business (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 electronic auction hosted by IBA that begins at

10:30

a.m. (London time) (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, 2018

and

2017:

Three Months Ended September 30, 2018	Ounces			Cost			Fair Value			Realized Gain (Loss)
Beginning balance		8,637,702		$	10,806,316,895		$	10,801,014,832		$	—
Gold bullion contributed		269,920			326,017,394			326,017,394			—
Gold bullion distributed		(298,773	)		(373,766,620	)		(369,770,728	)		(3,995,892	)
Gold bullion sold to pay expenses		(5,523	)		(6,907,415	)		(6,734,887	)		(172,528	)
Net realized loss		—			—			(4,168,420	)		—
Net change in unrealized appreciation/depreciation		—			—			(532,059,056	)		—
Ending balance		8,603,326		$	10,751,660,254		$	10,214,299,135		$	(4,168,420	)

Three Months Ended September 30, 2017	Ounces			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

The following tables summarize activity in gold bullion for the

nine

months ended

September 30, 2018

and

2017:

Nine Months Ended September 30, 2018	Ounces			Cost			Fair Value			Realized Gain (Loss)
Beginning balance		7,828,465		$	9,663,574,842		$	10,149,604,427		$	—
Gold bullion contributed		1,889,512			2,482,260,820			2,482,260,820			—
Gold bullion distributed		(1,098,473	)		(1,374,005,462	)		(1,400,676,047	)		26,670,585
Gold bullion sold to pay expenses		(16,178	)		(20,169,946	)		(20,752,224	)		582,278
Net realized gain		—			—			27,252,863			—
Net change in unrealized appreciation/depreciation		—			—			(1,023,390,704	)		—
Ending balance		8,603,326		$	10,751,660,254		$	10,214,299,135		$	27,252,863

Nine Months Ended September 30, 2017	Ounces			Cost			Fair 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

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 analyzed applicable tax laws and regulations and their application to the Trust as of

September 30, 2018

and does

not

believe that there are any uncertain tax positions that require recognition of a tax liability.