From June 2016, Australian SMSF Audits will be placing news and other information relating to SMSFs onto our Facebook page.
Regulation 4.09(e) requires all SMSFs to include in their Investment Strategy whether there is a need for the Fund to hold a Contract of Insurance for members. Has your Investment Strategy been updated to cater for this requirement? The Fund’s auditor will need to sight your updated Investment Strategy to ensure that it complies. A contravention will occur if the strategy does not comply
Trustees are now required to “review regularly” their investment strategy. While the term “regularly” is not defined, it must be done at least annually. Furthermore, if a Fund’s investments do not comply with the Fund’s strategy, it indicates the strategy has not been reviewed and a contravention may have occurred.
REPORTING OF FUND ASSETS
SMSFs are required to report all Fund assets at market value. Market value is confirmed as the amount a willing buyer would pay to a willing seller in an orderly arm’s length transaction with proper marketing and both parties acting knowledgably and prudently. Failure to do so could lead to a penalty.
Auditors will need to sight evidence of how the value was attained, including a Trustee Minute recording the decision on how market value was ascertained and what evidence was used. This may not be required for listed securities, but is essential for assets such as real property, unlisted shares & unit trusts as well as collectibles.
Super News will be updated by Australian SMSF Audits from time to time.