| SIGNIFICANT ACCOUNTING POLICIES | 2.
SIGNIFICANT ACCOUNTING POLICIES In
preparing financial statements in conformity with U.S. GAAP, management of the Sponsor makes estimates and assumptions that affect
the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amount of revenue and expenses during the period. Actual results could differ from these estimates. The
following is a summary of significant accounting policies followed by the Trust. 2.1.
Basis of Presentation 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 only for financial
reporting purposes, the Trust is classified as an Investment Company (as defined in ASC 946). The Trust is not registered as an
investment company under the Investment Company Act and is not required to register under such act. 2.2.
Valuation of Gold The
Trust follows the provisions of FASB ASC 820, Fair Value Measurement (“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. The
Administrator evaluates the gold held by the Trust and determines the NAV of the Trust on each day that the Exchange is open for
regular trading, as promptly as practical after 4:00 p.m. New York time. The cost of gold is determined using the specific
identification method. The NAV of the Trust is the aggregate value of gold and any other assets of the Trust, including cash, if
any, less liabilities of the Trust, which include estimated accrued but unpaid fees, expenses, and other liabilities. In determining
the Trust's NAV, the Administrator values the gold held by the Trust based on the afternoon London gold price per troy ounce of gold
for delivery in London through a member of the London Bullion Market Association (“LBMA”) authorized to effect such
delivery, as calculated and administered by independent service provider(s) and published by the LBMA on its website or by its
successor that publicly displays prices (the “LBMA PM Gold Price”), or, if such day's afternoon price is not available,
the morning LBMA Gold Price (the “LBMA AM Gold Price”). If no LBMA Gold Price is available for the day, the
Administrator will value the Trust's gold based on the most recently announced LBMA PM Gold Price or LBMA AM Gold Price. If the
Sponsor determines that such price is inappropriate to use, it shall identify an alternate basis for evaluation to be employed by
the Administrator. The Sponsor may instruct the Administrator to use a different publicly available price, which the Sponsor
determines to fairly represent the value of the Trust's gold. Neither
the Trustee nor the Sponsor are liable to any person for the determination that the most recently announced LBMA PM Gold Price
(or other benchmark price) is not appropriate as a basis for evaluation of the gold held or receivable by the Trust or for any
determination as to the alternative basis for evaluation, provided that such determination is made in good faith. ASC
820 establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs
are: 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. The
Sponsor categorizes the Trust’s investment in gold as a Level 1 asset within the ASC 820 hierarchy. December
31, 2021
Level
1 Level
2 Level
3
Investment in gold $ 1,722,881 $ — $ —
Total $ 1,722,881 $ — $ — 2.3.
Expenses The
Trust pays the Sponsor a fee that will accrue daily at an annualized rate equal to 0.65 The
following ordinary and recurring fees of the Trust will be paid by the Administrator out of the Sponsor Fee: the Administrator
Fee, the Gold Custodian Fee, the Cash Custodian Fee, the Transfer Agent Fee, the Representative Fee, the Trustee Fee, the Partnership
Representative Fee, the Index Calculation Agent Fee, the Trust’s audit fees (including any fees and expenses associated
with tax preparation) and up to $ 100,000 To
pay the Sponsor Fee, the Cash Custodian will withdraw from the cash on deposit in the cash account an amount of U.S. dollars
equal to the Sponsor Fee, determined as described above. Any Sponsor-Paid Expenses will be netted out of the Sponsor
Fee, and the Cash Custodian will, pursuant to the instruction of the Administrator, directly pay the recipients of such amounts.
After netting such Sponsor-Paid Expenses, the Administrator shall instruct the Cash Custodian to pay the remaining amount of the
Sponsor Fee to the Sponsor. The Sponsor, from time to time, may waive all or a portion of the Sponsor Fee in its
sole discretion. The
Trust has capitalized certain offering costs and amortizes those costs over a 12-month period. The Trust capitalized $ 76,734 of offering costs and has amortized $ 65,171 11,563 25,869 6,496 19,373 The
Trust is required to pay certain other fees and expenses that are not contractually assumed by the Sponsor, including, but not
limited to, any fees and expenses associated with the Trust’s monthly rebalancing between Physical Gold and cash, any other
fees (including commissions and/or exchange fees) associated with the buying and selling of Physical Gold for the Trust, fees
and expense reimbursements due to the Marketing Agent, the Trust’s regulatory fees and expenses (including any filing, application
or license fees), printing and mailing costs, costs of maintaining the Trust’s website, the Trust’s legal fees and
expenses to the extent they exceed $ 100,000 2.4.
Gold Receivable or Payable and Revenue Recognition Policy 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. Gold receivable or payable
also represents the quantity of gold yet to be received from or distributed to the Gold Custodian in conjunction with a rebalance
transaction. Generally, ownership of the gold is transferred within two business days of the trade date. The
Sponsor, on each Rebalance Date, shall instruct the Representative to purchase and/or sell Physical Gold. In addition, the Administrator,
acting pursuant to instructions from the Sponsor, shall, on the Rebalance Date, instruct the Cash Custodian to pay amounts due
and payable by the Trust as of the Determination Date. When selling gold to pay expenses, the Representative will endeavor to
sell the smallest amount of gold needed to pay expenses to minimize the Trust’s holdings of assets other than gold. Unless
otherwise directed by the Sponsor, the Representative will sell gold to the Custodian at the next LBMA Gold Price PM following
the sale order. A gain or loss is recognized based on the difference between the selling price and the average cost of the gold
sold on the trade date, and such amounts are reported as net realized gain/(loss) from investment in gold sold for rebalancing and to pay expenses
in the statement of operations. Gold transactions are recorded on the trade date. The cost of gold is determined using the specific
identification method. 2.5.
Creations and Redemptions of Shares The
Trust creates and redeems Shares from time to time, but only in one or more Creation Units. A Creation Unit is a block of 10,000 500 Authorized
Participants must be (i) registered broker-dealers or other securities market participants, such as banks and other financial
institutions, which are not required to register as broker-dealers to engage in securities transactions, and (ii) participants
in the Depository Trust Company (the “DTC”). To become an Authorized Participant, a person must enter into an Authorized
Participant Agreement with the Trust and the Sponsor. The Authorized Participant Agreement sets forth the procedures for the creation
and redemption of Creation Units and for the payment of cash required for such creations and redemptions. The Sponsor may delegate
its duties and obligations under the Authorized Participant Agreement to the Marketing Agent, the Administrator, or the Transfer
Agent, without consent from any Shareholder or Authorized Participant. The Authorized Participant Agreement may be amended by
the Sponsor only with the consent of the Authorized Participant, while the procedures attached thereto may be amended with notice
to the Authorized Participant by following the procedures specified in the Authorized Participant Agreement. Shareholder consent
is not required in either case. To compensate the Transfer Agent for services in processing the creation and redemption of Creation
Units, an Authorized Participant is required to pay a transaction fee of $500 per order to create or redeem Creation Units. Changes
in the Shares for the year ended December 31, 2021 are as follows:
Share(s) Amount
Balance at January 1, 2021 1 $ 18
Creation of Shares 100,000 1,800,000
Redemption of Shares — —
Balance at December 31, 2021 100,001 $ 1,800,018 2.6.
Organizational Costs The
costs of the Trust’s organization were borne directly by the Sponsor. The Trust is obligated to pay, or reimburse the Sponsor
for, Additional Trust Expenses and any fees and expenses that are specified in the Trust Agreement as payable by the Trust. 2.7.
Income Taxes The
Trust is classified as a “partnership” for United States federal income tax purposes. As a result, the Trust itself
is not subject to United States federal income tax. Instead, the Trust’s income, gain, losses, and expenses will “flow
through” to the Shareholders, and the Trustee reports these to the Internal Revenue Service on that basis. 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 December
31, 2021 , all tax years are open for examination. There is no examination in progress at period end. |
