NOTES TO FINANCIAL STATEMENTS (Unaudited)
(1) Significant Accounting Policies:
The Primary Institutional Fund (the "Fund") which is a part of the Reserve Institutional Trust (the "Trust") is
registered under the Investment Company Act of 1940 as a non diversified, open end investment company. The
policies summarized below are consistently followed in the preparation of its financial statements in conformity
with generally accepted accounting principles.
A. The Trust's authorized shares of beneficial interest are unlimited, and currently are divided into four series
(funds): Primary Institutional, which is included in this report, U.S. Government Institutional, U.S. Treasury
Institutional and Interstate Tax Exempt Institutional Funds (collectively the "Funds"). Additionally, each Fund is
divided into five classes of shares with similar investment objectives, but with different expense ratios.
B. Securities are valued at amortized cost, which approximates market value. The amortized cost method values
a security at cost at the time of purchase, and thereafter assumes a constant amortization to maturity of any
discount or premium, irrespective of intervening changes in interest rates or market values. The maturity of floating
or variable rate instruments in which the Fund may invest will be deemed to be, for floating rate instruments (1)
the notice period required before the Fund is entitled to receive payment of the principal amount of the
instrument; and for variable rate instruments the longer of (1) above or
(2) the period remaining until the instrument's next interest rate adjustment, for purposes of Rule 2a-7 and for
computing the portfolio's average weighted life to maturity.
C. It is the policy of each Fund within the Trust to comply with Subchapter M of the Internal Revenue Code and
to distribute all of its taxable income to its shareholders. Accordingly, no Federal income tax provision is
D. Security transactions are recorded on a trade date basis; interest income is a