Notes to Financial Statements
(1) SIGNIFICANT ACCOUNTING POLICIES. Baron Asset Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the"1940 Act"), as a diversified, open-end management
investment company established as a Massachusetts business trust on February 19, 1987. The Trust currently
offers four series (individually a "Fund" and collectively the "Funds"): Baron Asset Fund, started in June of 1987,
Baron Growth Fund, started in January of 1995, Baron Small Cap Fund, started in October of 1997, and Baron
iOpportunity Fund, started in February of 2000. The following is a summary of significant accounting policies
followed by the Funds. The policies are in conformity with generally accepted accounting principles.
(a) SECURITY VALUATION. Portfolio securities traded on any national stock exchange or quoted on the
NASDAQ National Market System are valued based on the last sale price or, where market quotations are not
readily available, based on fair value as determined by the Adviser, using procedures established by the Board of
Trustees. Money market instruments held by the Funds with a remaining maturity of sixty days or less are valued
at amortized cost, which approximates value.
(b) SECURITIES TRANSACTIONS, INVESTMENT INCOME AND EXPENSE ALLOCATION.
Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are
recorded on an identified cost basis for financial reporting and federal income tax purposes. Dividend income is
recognized on the ex-dividend date and interest income is recognized on an accrual basis. Common expenses of
the Funds are allocated on a basis deemed fair and equitable by the Trustees, usually on the basis of average net
assets. Direct expenses are charged to each Fund on a specific identification basis.
(c) FEDERAL INCOME TAXES. Each Fund of the Trust is treated as a separate entity for federal income tax
purposes. It is the policy of each Fund to continue to qualify as a regula