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I have a Accountant client who is showing employer and member contributions only on the member statements. It is not disclosed as income on the P&L. He has properly disclosed all concessional contributions on the tax return and calculated tax properly. I have never come across this type of disclosure. Is this acceptable? He has been auditing the funds in-house previously and has come to me due to the new independence rules.
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Thank you very much. One learns something new everyday.
Hi Jan
Yes it is acceptable that contributions are not disclosed in the Profit & Loss (Operating) Statement.
I agree most accountants do record contributions as income in the operating statement for SMSF's.
As the financial statements are special purpose financial statements the trustees can prepare the financial statements at their discretion. That is the Profit & Loss (Operating) Statement does not have to include contributions. The notes to the accounts need to explain on what basis the financial statements have been prepared. I would expect that if contributions (or rollovers or benefit payments) are not included in the Profit & Loss (Operating) Statement that there is a reconciliation of the net assets from the start of the year to the end of the year in the notes to the financial statements.
The accounting standard for Superannuation Fund accounting is AASB 1056. It only applies to reporting entities and it does not include contributions (or rollovers or pensions or benefit payments) in the income (operating) statement. Contributions are included in a Statement of Changes in Member Benefits.
Thanks
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