When SMSF trustees prepare the financial statements and accounts for their fund, they must report the fund assets at market value to comply with regulation 8.02B of the Superannuation Industry (Supervision) Regulations 1994 (SISR). Before this came into force on 7 August 2012, unless the fund was paying a pension or held in-house assets, trustees could provide a valuation for fund assets every three years. This was considered no longer sufficient, and assets must now be reported at market value every year with evidence to support the valuation.
However in its latest update to the rules around reg 8.02B, the ATO states (scroll down) that it will not impose penalties if it is satisfied that SMSF trustee finds it difficult to obtain the required valuation evidence for fund assets due to the impacts of COVID-19.
“If we are satisfied this was due to the impacts of COVID-19, the contravention will not result in penalties,” the ATO says. “Instead the trustee will receive a letter from us advising them to ensure they comply with our valuation guidelines and have supporting valuation evidence by the time of their next audit if possible, as repeated contraventions can lead to penalties.”
The rules state that it is the trustee’s responsibility to provide documents requested by their auditor which supports the market valuation for their assets. It is not the auditor’s role to determine the market value of the fund’s assets.
The ATO does advise however that auditors should consider the need to modify Part B of their audit report and lodge an auditor/actuary contravention report (ACR), if necessary, during the 2020 and 2021 financial years. The ACR should include the reasons why the trustee was unable to obtain the appropriate evidence.