Trust deed issue flagged with new accounting standard
SMSFs that are set up after 1 July or those intending to change their trust deed after this date will need to review certain clauses in their trust deed if they want to prepare special purpose financial statements, says the ATO.
A new amended accounting standard has been released by the Australian Accounting Standards Board (AASB). AASB 2020-2 will come into effect from 1 July 2021.
The ATO said this will change the reporting requirements of certain for-profit private sector entities, which will no longer be able to self-assess financial reporting requirements and prepare special purpose financial statements (SPFS) if their trust deeds were created or amended on or after 1 July 2021 and require preparation of financial statements that comply with the Australian Accounting Standards (AAS).
It also means that new SMSFs that are set up after 1 July 2021 and wish to prepare SPFS will need to ensure they don’t have a clause in their trust deeds that require their financial statements be prepared in accordance with the AAS.
“Similarly, existing SMSFs that intend to change their trust deed after 1 July 2021 should remove such a clause if they wish to continue preparing SPFS,” the Tax Office said.
“Most SMSF trust deeds refer to the financial statements being prepared in accordance with the super laws and do not refer to the AAS, so this should not become an issue for the majority of SMSFs.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.