Are you about to hand over SMSF financial statements for year ended 30th June 2017 to the auditor for audit - Hold on - Read this article first.

Under the new law, if a member has total superannuation balance equal to the balance transfer cap amount (in 2017 - 18 year $1.6M), a superannuation fund member cannot contribute any further non-concessional contributions to any fund, including the SMSF for which you have just prepared the accounts for.

There are also limits on how much a member can contribute once total superannuation balance of the member is $1.4M & $1.5M which reduces the total amount that can be contributed to evoke the bring forward rule.

Total superannuation balance of the member is what you report to the ATO in the member statement of the income tax return of the fund. This member balance is most likely incorrect, read below why.

 

Why are SMSF assets valued at Market Value on 30th June?

As per SIS REG 8.02B requires all assets of the fund must be valued at market value further, as per Sect 35B(2) of the SIS Act, for the year of income 2012-13 and any later year of income, when preparing accounts and statements required by 35B(1) of the Act, an asset must be valued at its market value.

Market value is defined in Sec 10(1) of the Act, in relation to an asset, means the amount that a willing buyer of the asset could reasonably be expected to pay to acquire the asset from a willing seller if the following assumptions were made:

(a) that the buyer and the seller dealt with each other at arm's length in relation to the sale;

(b) that the sale occurred after proper marketing of the asset;

(c) that the buyer and the seller acted knowledgeably and prudentially in relation to the sale.

Determining market value of an asset can be difficult if the asset of the fund is not a listed security, for example unlisted shares, unit trusts & property. Readers should also refer to AASB accounting standard 1056 for Superannuation entities and AASB13 Fair Value measurement for guidance on how market value of an asset should be displayed in financial statements.

 

How market value of assets changes member balances?

We must value all assets to market value as on 30th June and credit or debit any unrealized gain or loss to the member accounts per SIS Regulation 5.03 - the trustee of a regulated superannuation fund must determine the investment return to be credited or debited to a member's benefits (or benefits of a particular kind) in a way that is fair and reasonable as between

(a) all the members of the fund; and

(b) the various kinds of benefits of each member of the fund.

Hence any change in market value directly affects SMSF member balance. Usually Accounting software will automatically do these calculations for you and allocate income of the fund, realized and unrealized to each member on daily balance method. Some softwares will allow you to override these automatic calculations and let the administrator do these calculations for the fund.

Please note if the trust deed allows the trustee, some assets can be segregated for investment purposes for any particular member. If a member has chosen a particular asset, the income of that asset (after tax calculations) must be credited to that particular member. This means that software calculations may be inaccurate.

This type of selection of income earning assets can be beneficial where there is a mix of pension and accumulating members. Any income which is credited to a pension member account after commencing continues to be in pension phase. This means that a member can have a higher balance than the $1.6M balance transfer cap amount depending on the income credited to it as compared to pension withdrawals by the member.

Hence, valuation of assets is very critical in two instances, one where the member may want to contribute non-concessional contributions in future and specially for those members whose total superannuation balances are close to $1.6M and second where income has to be credited to pension members and there are accumulating members in the fund, as allocation of income can change the percentage of exempt pension income deduction which the fund can claim in future years.

Proposed Agenda

9.00 AM  Registration - Arrival Tea and Coffee

9.30 AM - 11.00 AM  Introduction to Audit Online on SMSF Audit Software and Website Integration

11.00 AM - Morning Tea

11.30 AM - 1 PM How can the accountant and trustee inter act with the software

1.00 PM - 2.00 PM Lunch and Networking 

2.00 PM - 3.30  Advanced SMSF Audit Issues and how to complete and audit in half time

03.30 PM  Workshop Closed

 

Introduction/Overview

SMSF Auditors spend too much time in financial audit and completing manual audit working papers, our online software does most of this work automatically & saves half your time as compared to traditional auditing methods. It checks closing share prices, dividends received from ASX and all mundane tasks of signing, scanning & mailing of audit report, Mgt. letter, engagement letter, Invoice & contravention reports etc. are automated with one click of a mouse.

Embrace an efficient framework for high quality audits and conduct audits on a flawless workflow Management system.

Achieve peace of mind & confidence of knowing that you are using a completely up-to-date online checklist and cloud process to deliver a robust, hassle free top quality SMSF audit. Improve communication with accountants & trustees. Manage 20 or 2000 audits by streamlining workflow from our smart Audit Manager & establish seamless communication between all parties. Our online SMSF audit system is the only tool which can deliver reliability, speed and volume and ultimately profits for your business at a fraction of the cost.

Audit from anywhere, anytime from any device on your own website or by integrating with ours. Increase audit effectiveness, add value, reduce audit risk, drive SMSF compliance, revolutionise your business.

Included in the fee is an account to audit 10 SMSF on the online platform worth $187 and Lunch & Coffee.

Those auditors who are already using the online software will benefit by learning new shortcuts and other advanced features of the online software. 

All SMSF ASIC approved auditors.

 

CPD Hours

 

Attendee Requirements

 

Speaker