If you are the trustee of a self-managed super fund (SMSF), each year you need to value your SMSF’s assets at market value and provide supporting evidence to your auditor.
Market value of an asset
The market value of an asset is the amount that a willing buyer and seller would agree to in an arms-length transaction. These valuations will be used when preparing your fund’s accounts, statements and SMSF annual return (SAR). Your asset valuations will be reviewed by your approved SMSF auditor as part of the annual audit prior to lodgment of your SAR. Your auditor will check that assets have been valued correctly, and will assess and document whether the basis for the valuations is appropriate given the nature of the asset. They are not responsible for valuing fund assets.
Make sure you get your valuations done before going to your auditor. It’s your responsibility as the trustee of the SMSF to provide objective and supportable evidence to your auditor for the valuation of the fund’s assets, including all relevant documents requested to prevent delays in auditing the fund. Failure to do so could result in a potential late lodgment of your annual return or a contravention if mistakes have been made.
Who can value assets?
Depending on the situation, a valuation may be undertaken by a: registered valuer; professional valuation service provider; member of a recognised professional valuation body; or person without formal valuation qualifications but who has specific experience or knowledge in a particular area. In certain instances, the law requires valuations be undertaken by a qualified, independent valuer, for example, where any collectables and personal use assets that were acquired on or after 1 July 2011 are disposed of to a related party. But it is advisable to use a qualified, independent valuer in all cases. A valuer will be qualified either through holding formal valuation qualifications or by being considered to have specific knowledge, experience and judgment by their particular professional community. This may be demonstrated by being a current member of a relevant professional body or trade association. In all cases, the person who conducts the valuation must base their valuation on objective and supportable data.
Speak to one of our accountants if you have any questions about the changes in tax for 2024.
