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Valuing fund assets correctly for the SMSF annual return

Every year you need to value your SMSFs assets and provide supporting evidence to your auditor.

Published 25 March 2024

A key responsibility self-managed super fund (SMSF) trustees have every income year is valuing your fund's assets at 'market value'.

Prior to lodging your SMSF annual return (SAR), your fund's SMSF auditor is required to check the assets have been valued correctly and assess and document whether the basis for the valuation is appropriate.

We are increasingly using data to identify and deal with risks and have recently identified a number of funds who have maintained the same values on reported SMSF assets in their annual return.

We are concerned these funds may not be meeting their legal requirement to value and report their assets at ‘market value’ every year.

Of specific concern is a higher risk category of approximately 16,500 funds which have reported certain classes of assets at the same value for at least three income years. This includes residential and commercial property, unlisted companies and unlisted trust investments.

There were more than 1,000 SMSF auditors associated with this high-risk population and our data tells us no auditor contravention reports (ACRs) were lodged for potential breaches of the market valuation rules for the assets. 

To address this, we have commenced sending targeted messages to trustees and auditors about this obligation and we will be monitoring the approach taken by the funds in their next annual return.

Trustees are reminded that:

  • if your asset valuations fail to meet the valuation requirements, the fund and members may have additional tax to pay and you could be liable for administrative penalties.
  • as part of the annual audit process, you must provide objective and supportable evidence to your SMSF auditor to support the valuation of your fund assets. This includes providing all relevant documents specifically requested by your auditor.

It is important for trustees to ensure their SMSF's assets are reported at market value when next preparing their financial statements and annual returns.

Have a look at our SMSF valuation guidelines for more information.

Looking for the latest news for SMSFs? – You can stay up to date by visiting our SMSF newsroom and subscribingExternal Link to our monthly SMSF newsletter.