Winthrop Opportunity Funds--Notes to Financial Statements October 31, 1998 (continued)
(3) Federal Income Taxes: The Funds intend to be treated as "regulated investment companies" under Sub-
chapter M of the Internal Revenue Code and to distribute substantially all of their net taxable income.
Accordingly, no provisions for Federal income or excise taxes have been made in the accompanying financial
statements. The Developing Markets Fund has an unused capital loss carryover of approximately $3,772,000
available for Federal income tax purposes to be applied against future net securities profits, if any, realized
subsequent to October 31, 1998. If not applied, approximately $3,185,000 and $587,000 of the carryover
expires in fiscal 2005 and 2006, respectively.
(4) Investment Income and Securities Transactions: Dividend income is recorded on the ex-dividend date or as
soon as the Fund is informed of the dividend. Interest income is accrued daily. Security transactions are
accounted for on the date securities are purchased or sold. Security gains and losses are determined on the
identified cost basis.
(5) Dividends and Distributions: Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income dividends and capital gain distributions are determined in accordance with income tax regulations,
which may differ from generally accepted accounting principles.
(6) Deferred Organization Costs: The Funds will reimburse the Advisor for costs incurred in connection with the
Funds' organization. The costs are being amortized on a straight-line basis over five years commencing with the
(7) Reclassification of Components of Net Assets: At October 31, 1998, the following reclassifications were
recorded to reflect permanent book/tax differences: International Equity Fund reduced capital paid-in $925,302;
reduced accumulated net realized gain on investments $138,143; and reduced accumulated net investment loss
$1,063,445. Developing Markets Fund reduced capital pa