Note 2 - Significant Accounting Policies

12 Months Ended

Dec. 31, 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 generally accepted accounting principles in the United States of America (“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. Silver Bullion

JPMorgan Chase Bank N.A., London branch (the “Custodian”), is responsible for the safekeeping of silver bullion owned by the Trust.

Fair value of the silver bullion held by the Trust is based on that day’s LBMA Silver Price. “LBMA Silver Price” is the price per ounce of silver, stated in U.S. dollars, determined by the ICE Benchmark Administration (“IBA”) following an electronic auction consisting of

one

or more

30

-

second

rounds starting at

12:00

p.m. (London time), on each day that the London silver market is open for business, and published shortly thereafter. If there is

no

LBMA Silver Price on any day, the Trustee is authorized to use the most recently announced LBMA Silver Price unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate as a basis for evaluation. Prior to

October 2, 2017,

the LBMA Silver Price was determined using an electronic auction administered by CME Group Inc. (“CME Group”) and published by Thomson Reuters. Effective as of

October 2, 2017,

IBA replaced CME Group and Thomson Reuters as the administrator for the LBMA Silver Price and began administering the electronic auction for the LBMA Silver Price.

Gain or loss on sales of silver bullion is calculated on a trade date basis using the average cost method.

The following tables summarize activity in silver bullion for the years ended

December 31, 2018,

2017

and

2016:

Year Ended December 31, 2018	Ounces			Cost			Fair Value			Realized Gain (Loss)
Beginning balance		320,629,662		$	5,831,748,196		$	5,407,419,250		$	—
Silver bullion contributed		60,236,118			954,051,929			954,051,929			—
Silver bullion distributed		(62,004,144	)		(1,114,932,000	)		(982,882,736	)		(132,049,264	)
Silver bullion sold to pay expenses		(1,628,026	)		(29,309,969	)		(25,579,758	)		(3,730,211	)
Net realized loss		—			—			(135,779,475	)		—
Net change in unrealized appreciation/depreciation		—			—			(311,211,423	)		—
Ending balance		317,233,610		$	5,641,558,156		$	4,906,017,787		$	(135,779,475	)

Year Ended December 31, 2017	Ounces			Cost			Fair Value			Realized Gain (Loss)
Beginning balance		341,348,242		$	6,305,715,839		$	5,543,495,441		$	—
Silver bullion contributed		52,760,584			873,170,446			873,170,446			—
Silver bullion distributed		(71,810,555	)		(1,316,488,192	)		(1,226,578,286	)		(89,909,906	)
Silver bullion sold to pay expenses		(1,668,609	)		(30,649,897	)		(28,438,986	)		(2,210,911	)
Net realized loss		—			—			(92,120,817	)		—
Net change in unrealized appreciation/depreciation		—			—			337,891,452			—
Ending balance		320,629,662		$	5,831,748,196		$	5,407,419,250		$	(92,120,817	)

Year Ended December 31, 2016	Ounces			Cost			Fair Value			Realized Gain (Loss)
Beginning balance		317,934,907		$	5,979,251,955		$	4,393,860,514		$	—
Silver bullion contributed		97,670,323			1,702,628,324			1,702,628,324			—
Silver bullion distributed		(72,574,751	)		(1,344,950,576	)		(1,236,224,053	)		(108,726,523	)
Silver bullion sold to pay expenses		(1,682,237	)		(31,213,864	)		(28,700,680	)		(2,513,184	)
Net realized loss		—			—			(111,239,707	)		—
Net change in unrealized appreciation/depreciation		—			—			823,171,043			—
Ending balance		341,348,242		$	6,305,715,839		$	5,543,495,441		$	(111,239,707	)

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 silver 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 silver 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 silver is

not

reasonably practicable.

The per Share amount of silver exchanged for a purchase or redemption represents the per Share amount of silver held by the Trust, after giving effect to its liabilities.

When silver bullion is exchanged in settlement of a redemption, it is considered a sale of silver bullion for accounting purposes.

Share activities for the years ended

December 31, 2018,

2017

and

2016

were as follows:

	December 31,
	2018						2017						2016
	Shares			Amount			Shares			Amount			Shares			Amount
Shares issued		64,000,000		$	954,051,929			55,800,000		$	873,170,446			102,750,000		$	1,702,628,324
Shares redeemed		(65,900,000	)		(982,882,736	)		(75,950,000	)		(1,226,578,286	)		(76,400,000	)		(1,236,224,053	)
Net increase (decrease)		(1,900,000	)	$	(28,830,807	)		(20,150,000	)	$	(353,407,840	)		26,350,000		$	466,404,271

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

December

31, 2018

and does

not

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