Hi Brian,

You can use the 2020 valuations for both the 2019 and 2020 accounts. This is on the basis that valuations reflect the current market value. Given what you have raised I would recommend that the financial statements have a note to the accounts that explain that Covid may have had an impact on the valuation of assets at 30 June of each of each of these years and also potentially going forward.

SISR 8.02B requires that Trustees must value Fund assets at market value.

The ATO published ATO document “Valuation guidelines for SMSF’s”, refer:

www.ato.gov.au

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

The ATO advises that trustees should consider obtaining an independent valuation if:

Asset represents a significant proportion of Fund’s value, and

The valuation is complex or difficult.

The ATO advises that a valuation will be considered fair and reasonable if it:

Takes into account relevant factors & considerations re its value.

Undertaken in good faith.

Rational and reasoned process.

Capable of explanation to a third party.

The ATO in their guidelines do not refer to a 3 year valuation concept for assets such as property so it is important that trustees and auditors review valuations on a yearly basis. The ATO does give guidance in relation to valuations for property and notes that:

External valuations are not required each year and they can be prepared by anyone.

Valuations may consider:

Value of similar properties.

Value paid for property in an arm’s length market.

Independent appraisals.

Has property been improved since last valuation.

For commercial properties net income yields.

Online services.

Real estate agent valuation is acceptable.

SMSF AAA