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4 April 2024

Valuing Your SMSF's Assets: A Vital Responsibility

As an SMSF trustee, one of your key responsibilities each income year is to value your fund's assets at 'market value'. This valuation is crucial for accurately reporting your SMSF's financial position in its annual return.

Partnering with Your SMSF Auditor

Prior to lodging your SMSF annual return, your auditor will review your fund's assets to ensure they have been valued correctly. They will also assess and document whether the basis for the valuation is appropriate. This is a critical step in maintaining compliance with regulatory requirements.

Addressing Potential Risks

Recently, the ATO has identified a number of funds that have maintained the same values on reported SMSF assets in their annual returns over multiple years. This raises concerns that these funds may not be meeting their legal requirement to value and report their assets at 'market value' annually.

Of particular concern are approximately 16,500 funds that have reported certain classes of assets at the same value for at least three income years. These assets include residential and commercial property, unlisted companies, and unlisted trust investments.

Collaborative Action for Compliance

To address this issue, the ATO has begun sending targeted messages to trustees and auditors about their obligation to value assets at 'market value' annually. They will also be closely monitoring the approach taken by these funds in their next annual return.

Ensuring Compliance and Avoiding Penalties

Trustees are reminded that failure to meet the valuation requirements can result in additional tax for the fund and its members, and trustees could be liable for administrative penalties. As part of the annual audit process, trustees must provide objective and supportable evidence to their SMSF auditor to support the valuation of their fund assets.

Moving Forward

It is crucial for trustees to ensure their SMSF's assets are reported at 'market value' when preparing their financial statements and annual returns. For more detailed information, refer to the ATO SMSF valuation guidelines.

As your SMSF auditor, the experienced team at Superannuation Audit Services are here to assist you in navigating these requirements and ensuring compliance for your fund. 

About Superannuation Audit Services


Superannuation Audit Services is a leading SMSF auditing company based in Melbourne, with a broad reach servicing clients Australia wide. Our experienced team is dedicated to delivering reliable and thorough audit services to ensure compliance with regulatory requirements, offering peace of mind to our clients.

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