FAQ
Most frequent questions and answers
For assets such as cash, term deposits, widely-held managed funds, ETFs and listed securities, these can be valued easily each year and should be valued at the end of each financial year.
It is typically easy for trustees to value shares, managed funds and other listed investments because they can obtain daily valuations online. For assets such as properties, we can do the valuation for you.
The fund’s auditor may also request evidence to show the rental income received by the fund is paid on commercial terms, such as:
- Annual Rental Income & Expenses Schedule from your real estate management agent covering the lease of the property during the year.
- Lease agreement organised via a real estate agent or other written lease agreement
- Rental appraisal by a property valuer – we can do this.
- Supporting evidence such as For Rent listing or tenants notice to end contract and an explanation from the trustees if no rental income was received during the year
SMSF managers need to prepare annual financial accounts and statements, and these accounts must include the market value of any property asset in a SMSF. A valuation provides objective and supportable data that can be used by the auditor of the SMSF to sign off on the financial statements.
What is the market value of an asset?
“Market value” means the amount that a willing buyer of the asset could reasonably be expected to pay to acquire the asset from a willing seller if the following assumptions were made:
- The buyer and the seller dealt with each other at arm’s length in relation to the sale
- The sale occurred after proper marketing of the asset, and
- The buyer and the seller acted knowledgeably and prudentially in relation to the sale.