10 reasons why assets need to be valued

Why assets need to be valued

Asset valuation is a key component in preparing meaningful SMSF financial reports. It has an impact on the returns for members and ultimately, SMSF sector performance as a whole.

A valuation of assets is required to confirm your SMSF has complied with relevant super law for:

1. preparing the financial accounts and statements of the fund
2. acquiring assets between SMSFs and related parties
3. investments made and maintained on an arm’s-length basis
4. disposing of certain collectables and personal use assets to a related party of the fund
5. determining the market value of an SMSF’s in-house assets as a percentage of all assets in the fund
6. determining the value of assets that support a member’s super pension
7. determining the value of existing retirement income streams at 1 July 2017 as they will be counted towards the transfer balance cap
8. determining the value of new retirement income streams on or after 1 July 2017, when they will be counted towards the transfer balance cap
9. determining the market value of assets that are eligible for transitional capital gains tax (CGT) relief in the 2016–17 income year
10. determining the market value of assets supporting members’ retirement phase and accumulation accounts for the purposes of calculating the members’ total superannuation balances.