Asset valuation is a key component in preparing SMSF financial reports to comply with compulsory ATO reporting requirements.

Valuations must be based on objective and supportable data and an asset must be valued at its market value.

The general rule of thumb used by the majority of SMSF auditors is for an independent external valuation to be undertaken every 3 years.

The ATO also requires a valuation from a qualified independent valuer in the following circumstances:-

  • acquiring or disposing of assets between SMSF’s and related parties;
  • to ensure investments are maintained on an arms length basis.

Valuations from a qualified valuer are also obtained if the value of the asset represents a significant proportion of the funds value, or the valuation is likely to be complex.