Trustees of a Self-Managed Super Fund (SMSF) are required to prepare accurate financial statements and tax returns each year, in line with ATO regulations and the Superannuation Industry (Supervision) Act.

One key requirement is ensuring that each asset and investment held by the SMSF is recorded accurately, specifically at market value. But what does that mean, and how often should SMSF valuations be updated?

How asset type impacts SMSF valuations

Different superannuation investments require different valuation methods. For example:

• Listed shares are simple to value thanks to live daily pricing
• Unlisted assets, such as private companies or commercial property, are more complex for a super fund to value

To meet SMSF audit standards, valuations must generally be updated annually. In some cases, such as investment property, an updated value every two years may be sufficient. This is true if the trustee can show the fund is still compliant with ATO superannuation rules.

What is considered objective and supportable Super Fund data?

According to the ATO guidelines (QC26343), market valuations must be based on objective data for an SMSF asset valuation to be considered accurate.

For real estate, this may include:

• Recent sales of similar properties
• The purchase price of the property (in an arm’s length market)
• Independent appraisals
• Net income yield (for commercial property)
• Property improvements
• Council rate notices (in conjunction with other data)

For unlisted companies or unit trusts:

• Net asset value (NAV)
• Current valuation of large assets held in unlisted trusts and securities such as property
• Independent valuation reports
• Price of recent sale/purchase
• Trust distribution statements

The valuation must meet the following criteria:

• Consider all factors that influence asset value
• Be prepared in good faith
• Follow a logical and reasoned process
• Be explainable to an independent third party

Do you need help managing compliance for your SMSF?

Australian superannuation rules are constantly evolving. Whether you need support with your SMSF audit, understanding SMSF meaning, or planning your super contributions, we’re here to help.

Talk to LDB’s superannuation team about:

• Employer super contributions
• Voluntary super contributions
• Personal and spouse super contributions
• Concessional super contributions and strategies to stay below the super contribution cap
• Understanding your maximum super contribution limits
• Managing super contribution tax
• Investing super in property through your SMSF
• Superannuation calculators and planning for retirement
• Choosing the right Australian super investment options
• Checking your fund on the SMSF lookup tool

Call (03) 9875 2900 or use the form below to speak with an experienced superannuation accountant in Melbourne.