A fund purchased a property several years ago for $900k. The property has since been subdivided into two lots of equal size. However, Lot A retained the building existing on the property. When accounting for the split, the fund has allocated the cost base 50/50 between the new assets. However, income tax law states that the apportionment must be reasonable. Given the building, it would seem a 50/50 split overstates the cost base of Lot B.

Overall materiality is $500k, therefore any misstatement in income tax expense is unlikely to be material to the financial statements. There also doesn't appear to be a breach of the SIS Act. The issue is going to be communicated to the trustees through the completion letter. Are there any further reporting requirements in respect of this matter?