The 30 June SMSF valuation checklist

What should every fund do at 30 June?

Work out a market value for every asset, whatever its type, and record how you reached it. Regulation 8.02B of the SIS Regulations requires each asset to be valued at market value when the accounts are prepared. The ATO's guide to valuing SMSF assets says to keep the evidence of how each value was determined, because the auditor may ask for it.

1. List every asset the fund held at 30 June, including cash, listed investments, property and any holding in a private company or unit trust.
2. Next to each asset, write the value, the source of the value and the date of the source.
3. Flag any asset carried at the same value as last year, and any asset affected by a significant event, such as a disaster, a pandemic, market volatility or a change in the asset's character.
4. Flag any asset that is a large share of the fund or complex to value. The ATO recommends considering a qualified independent valuer for these.
5. Keep the evidence in one file for the auditor.

What is the checklist for listed securities, managed funds and cash?

These are the easy ones, and the ATO expects them valued at the end of each financial year.

1. Listed shares and managed units: take the closing price on the approved exchange or licensed market on 30 June.
2. Units in widely held trusts and managed funds: use the published exit price from the fund or trust manager.
3. Cash and term deposits: confirm the balance at 30 June against the bank or institution statement.
4. Save the price source or statement with the file, because the auditor may ask for the documents that show how each value was reached.

What is the checklist for property?

Property needs more than one item of evidence, unless the fund bought it recently. The ATO's evidence list for real property is:

1. Gather comparable sales of similar properties.
2. If the fund bought recently at arm's length and nothing material has changed, keep the contract of sale.
3. Obtain an independent agent's appraisal that lists the comparable sales it relies on. The ATO says an appraisal that does not is generally not enough alone.
4. Note any improvements since the last valuation.
5. For commercial property, net income yield can support the value but is not enough alone, and only where tenants are unrelated.
6. Make sure the evidence supports a value as close as possible to 30 June.

Property held directly by your fund: we are not taking direct property valuations yet. If a trust or company owns the property, we value the units or shares using a property valuation you already hold.

What is the checklist for unlisted shares and unit trust units?

Build the value from the entity's assets and liabilities at 30 June, and keep the evidence for each. The guide asks trustees to consider the value of the entity's assets and the price paid for the shares or units.

1. Obtain the entity's financial statements and asset list at 30 June, with assets at market value rather than cost. The ATO says audited statements with assets at cost are unlikely to be enough alone.
2. Collect valuations for the entity's assets. Where property is its only asset, a property valuation is on the ATO's list of evidence.
3. Record the date and price of the latest sale or issue of shares or units between unrelated parties, if there was one.
4. Check the deed or constitution for anything that affects what the fund's holding is entitled to.
5. If there is no independent expert valuation, write down how the directors or trustees substantiated the value, with the data, method and assumptions.
6. Consider a qualified independent valuer if the holding is complex or a large share of the fund. See private company shares and unit trusts.

What is the checklist for relying on an earlier valuation?

Trustees can rely on one only if they assess it and record the assessment. The ATO says a valuation that has become materially inaccurate, or an asset whose value has changed significantly, should no longer be relied on.

1. Find the earlier valuation and its date, and record your assessment even when nothing has changed.
2. List what has changed since: assets, liabilities, earnings, ownership, borrowings and related-party dealings.
3. Decide whether the valuation still supports the 30 June value, and write down why.
4. If it does not, obtain a new valuation or other evidence.

As reported, the ATO has named valuing only every three years as an outdated practice. See ATO letters about unchanged values.

What is the checklist for pensions and the 5% in-house asset test?

1. Use the 30 June values for each member's total super balance.
2. For a pension that starts during the year, value the supporting assets on the start day for the transfer balance cap.
3. For an ongoing pension, value the supporting assets on 1 July for the annual minimum payment.
4. If a pension starts on 1 July and a full valuation is not possible by 28 October, for example because of private company shares, the ATO accepts a reasonable estimate for the transfer balance cap. It cannot be used for the accounts or exempt current pension income.
5. Identify any in-house assets: a loan to a related party, an investment in a related party, or an asset leased to a related party.
6. Value all assets at year end to test the 5% limit. If in-house assets exceed 5% at year end, the ATO says a written plan to reduce them must be prepared before the end of the following financial year.

See the in-house asset test. Which exclusions apply is for the fund's adviser.

What should go to the auditor?

1. The evidence file for every asset, in the order of the asset list.
2. Any valuation report, with the entity's financial statements and property valuations behind it.
3. A short note on why any earlier valuation still stands.
4. Prompt answers to the auditor's requests for documents.

The auditor's report is due within 28 days after the trustee has provided all documents relevant to it (regulation 8.03), so a complete file shortens the audit. The ATO's auditor guidance sets out what auditors check.

How do accountants and administrators handle several funds?

Build one asset list per fund, using the same checklist, and order any valuations together. We agree a delivery schedule for batches before we start. See our page for accountants and auditors.

Where we prepared the valuation last year for the same entity, with no restructure or major change, the annual 30 June update applies. Annual update: $495 + GST per entity. Delivery: 2 business days. Delivery time starts once payment and all required information have been received. Otherwise see pricing or the 30 June valuation page. We value; trustees and their advisers decide.