SMSF trustees have been reminded they will still be required to provide asset valuations for their fund for the 2020 and 2021 financial years, but will not be penalised if they can prove they were unable to report that value because of the coronavirus pandemic.
The ATO gave the reminder as part of an update on its website where it stated an SMSF asset must be valued every year and trustees must report the market value of those assets as part of the financial statements and accounts for their SMSF.
In the update, the regulator noted the impact of COVID-19 on asset valuations, particularly real property, adding an SMSF trustee may consider a new valuation as a result of the impact of the virus during the past financial year.
“If the trustee believes the external valuation has become materially inaccurate or the value of the property has since been affected by events, such as a natural disaster or COVID-19, they should no longer rely on it and obtain a new valuation or other sources of evidence supporting the valuation,” it said.
It stated it would not impose penalties on SMSF trustees who have not provided valuations if it was satisfied this was due to the impact of COVID-19, and those trustees would be notified that a valuation and evidence was required by the time of their next audit.
SMSF auditors, however, would still be required to reference the missing or out-of-date valuations in their report by lodging an auditor contravention report (ACR), it said.
“During the 2020 and 2021 financial years, if the trustee has difficulty obtaining valuation evidence due to the impacts of COVID-19, auditors should still consider modifying Part B of the audit report and lodge an ACR if necessary. They should provide reasons on the ACR as to why the trustee was unable to obtain the appropriate evidence,” it said.
Trustees were also reminded they could not push the task of gaining a valuation report or evidence for the value of assets onto the fund auditor and a failure to provide that information may force the auditor to lodge an ACR for their SMSF.
“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,” it said.
“Where the evidence is not sufficient and appropriate to enable the auditor to form an opinion the asset was valued at market value, the auditor must modify their audit report and consider whether an ACR should be lodged.”
