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