| Basis of Accounting and Significant Accounting Policies | 2.
Basis of Accounting and Significant Accounting Policies The
Sponsor has determined that the Trust falls within the scope of Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) 946, Financial Services—Investment Companies, and has concluded that for reporting purposes,
the Trust is classified as an Investment Company. The Trust is not registered as an investment company under the Investment Company Act
of 1940 and is not required to register under such act. The
preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires
those responsible for preparing financial statements to make estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Trust. 2.1
Custody and Fair Valuation of Gold The
Trust follows the provisions of ASC 820, Fair Value Measurements (“ASC 820”). ASC 820 provides guidance for determining fair
value and requires increased disclosure regarding the inputs to valuation techniques used to measure fair value. ASC 820 defines fair
value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. Gold
is held by ICBC Standard Bank Plc (the “Custodian”), on behalf of the Trust, at the Custodian’s London, United
Kingdom vaulting premises 97.29% and 99.96% of gold is allocated gold in the form of good delivery gold bars as of March 31, 2024 and 2023,
respectively. A current list of all gold held by the Custodian is available on the sponsor’s website. The cost of gold is determined according to the average cost method and the fair value is based on the
London Bullion Market Association (“LBMA”) PM Gold Price. If there is no LBMA Gold Price PM on any day, the Trustee is
authorized to use the most recently announced LBMA Gold Price AM unless the Trustee, in consultation with the Sponsor, determines
that such price is inappropriate as a basis for evaluation. The
LBMA PM Gold Price is set using the afternoon session of the ICE Benchmark Administration equilibrium auction, an electronic, tradable
and auditable over-the-counter auction market with the ability to participate in US Dollars, Euros or British Pounds for LBMA authorized
participating gold bullion banks or market makers that establishes a reference gold price for that day’s trading. The
per Share amount of gold exchanged for a purchase or redemption is calculated daily by the Trustee, using the LBMA PM Gold Price to calculate
the gold amount in respect of any liabilities for which covering gold sales have not yet been made, and represents the per Share amount
of gold held by the Trust, after giving effect to its liabilities, to cover expenses and liabilities and any losses that may have occurred. ASC
820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are
as follows: Level
1: Unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access. Level
2: Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly.
These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments and similar
data. Level
3: Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Trust’s
own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based
on the best information available. Schedule
of Trust’s Investments at Fair Value
March 31, 2024 Level 1 Level 2 Level 3
The following table summarizes the Trust’s investments at fair value:
(Amounts in 000’s of US$)
March 31, 2024 Level 1 Level 2 Level 3
Investment in Gold $ 1,003,597 $ – $ –
Total $ 1,003,597 $ – $ –
June 30, 2023 Level 1 Level 2 Level 3
The following table summarizes the Trust’s investments at fair value:
(Amounts in 000’s of US$)
June 30, 2023 Level 1 Level 2 Level 3
Investment in Gold $ 935,950 $ – $ –
Total $ 935,950 $ – $ – There
were no transfers between Level 1 and other Levels for the period ended March 31, 2024 and year ended June 30, 2023. 2.2
Expenses, realized gains and losses The
Trust’s only ordinary recurring fee is expected to be the fee paid to the Sponsor, which will accrue daily at an annualized rate
equal to 0.1749 The
Sponsor has agreed to assume administrative and marketing expenses incurred by the Trust, including the Trustee’s monthly fee and
out of pocket expenses, the Custodian’s fee and the reimbursement of the Custodian’s expenses, exchange listing fees, United
States Securities and Exchange Commission (the “SEC”) registration fees, printing and mailing costs, audit fees and certain
legal expenses. As
of period ended March 31, 2024, the fees payable to the Sponsor was $ 144,413 139,167 With
respect to expenses not otherwise assumed by the Sponsor, the Trustee will, at the direction of the Sponsor or in its own discretion,
sell the Trust’s gold as necessary to pay these expenses. When selling gold to pay expenses, the Trustee will endeavor to sell
the smallest amounts of gold needed to pay these expenses in order to minimize the Trust’s holdings of assets other than gold.
Other than the Sponsor’s Fee, the Trust had no Unless
otherwise directed by the Sponsor, when selling gold the Trustee will endeavor to sell at the price established by the LBMA PM Gold Price.
The Trustee will place orders with dealers (which may include the Custodian) through which the Trustee expects to receive the most favorable
price and execution of orders. The Custodian may be the purchaser of such gold only if the sale transaction is made at the next LBMA
PM Gold Price or such other publicly available price that the Sponsor deems fair, in each case as set following the sale order. A gain
or loss is recognized based on the difference between the selling price and the cost of the gold sold. Neither the Trustee nor the Sponsor
is liable for depreciation or loss incurred by reason of any sale. Realized
gains and losses result from the transfer of gold for Share redemptions and / or to pay expenses and are recognized on a trade date basis
as the difference between the fair value and cost of gold transferred. Gain or loss on sales of gold bullion is calculated on a trade
date basis using the average cost method. 2.3.
Gold Receivable and Payable Gold
receivable or payable represents the quantity of gold covered by contractually binding orders for the creation or redemption of Shares
respectively, where the gold has not yet been transferred to or from the Trust’s account. Generally, ownership of the gold is transferred
within two business days of the trade date. 2.4
Creations and Redemptions of Shares The
Trust issues and redeems in one or more blocks of 50,000 50,000 500 430 Authorized
Participants who make deposits with the Trust in exchange for Baskets will receive no fees, commissions or other form of compensation
or inducement of any kind from either the Sponsor or the Trust, and no such person has any obligation or responsibility to the Sponsor
or the Trust to effect any sale or resale of shares. 2.5
Income Taxes The
Trust is classified as a “grantor trust” for United States federal income tax purposes. As a result, the Trust itself will
not be subject to United States federal income tax. Instead, the Trust’s income and expenses will “flow through” to
the Shareholders, and the Trustee will report the Trust’s income, gains, losses and deductions to the Internal Revenue Service
on that basis. The
Sponsor has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined
that no reserves for uncertain tax positions are required as of March 31, 2024 and June 30, 2023. The
Sponsor evaluates tax positions taken or expected to be taken in the course of preparing the Trust’s tax returns to determine
whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions not
deemed to meet that threshold would be recorded as an expense in the current year. The Trust is required to analyze all open tax
years. Open tax years are those years that are open for examination by the relevant income taxing authority. As
of March 31, 2024, the 2023, 2022, 2021 and 2020 tax years remain open for examination. |
