in relation to the above. The trustee has come back and produced a professional valuation as at 22 Mary 2022 for a market value of $1,500,000 and agreed to amend the financial statements for FY2021 to reflect this new value, Accountant citing that the cost to do a retrospective valuation would be $1000 and this cost could be saved if I accepted the May 2022 value instead.

I note that the rules about valuation cannot be more than 3 years old. But what about using a forward valuation that is 12 months ahead of the year under audit, is this acceptable?

I don't agree that the cost is a factor in a compliance issue.

If I accepted this argument and adopted a valuation that was 12 months ahead, will I have sufficient grounds with the ATO to clear my audit quality?

Hi Stephen

My view is that as it is post 28 March 2022 a new valuation should be obtained and that it be used to assist in valuing the property as at 30 June 2021 in the financial statements of the Fund. I agree the Covid rental relief provisions do not mean that the valuation of an asset requirements can be ignored.

The trustees could come up with their own valuation if they can provide documentation to support the amount.

The ATO states that:

www.ato.gov.au

This ATO guide helps self-managed super fund trustees when valuing assets for superannuation purposes.

"Real property

When valuing real property, you may wish to consider using a qualified independent valuer, especially where the value of the property represents a significant proportion of the fund's value.

If you choose to do so, you are not required to obtain an external valuation each income year. However, you still need to ensure the external valuation can be used to support the market value you have used when preparing the fund's financial accounts and statements for the year.

If an external valuation has become materially inaccurate or a significant event has occurred that may have affected the value of the property since it was last valued you should no longer rely on it and obtain a new valuation or other evidence to support your valuation.

When valuing real property, relevant factors and considerations may include:

• the value of similar properties and recent comparable sales results

• the amount that was paid for the property in an arm's length market – if the purchase was recent and no events have materially affected its value since the purchase

• independent appraisals from a real estate agent (kerbside)

• whether the property has undergone improvements since it was last valued

• the rates notice (if consistent with other valuation evidence)

• for commercial properties, net income yields (not sufficient evidence on their own and only appropriate where tenants are unrelated).

Unless the property has been recently purchased by the fund, you should consider a variety of sources to substantiate the market value of real property. Generally, it is not sufficient for valuations to be based on only one item of evidence in the above list.

When valuing real property assets for the purpose of preparing the fund's financial accounts and statements, the valuation may be undertaken by anyone as long as it is based on objective and supportable data. A valuation undertaken by a property valuation service provider, including online services or real estate agent, would be acceptable. However, the valuation must stipulate the supportable data. For example, in the case of a real estate agent appraisal or online report, the valuation should list the comparable sales it relied on."

Thanks

SMSF AAA