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Does your SMSF or trust deed unnecessarily require general purpose, more costly, financial statements?

By Shaun Backhaus, Daniel Butler, DBA Lawyers
August 15 2023
3 minute read
daniel butler shaun backhaus smsf
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From July 2021 changes to the Australian Accounting Standards (AAS) have meant that many SMSFs and trusts (including discretionary and unit trusts) are required to prepare general purpose financial statements that comply with AAS.

Importantly, SMSFs and trusts are impacted by the changed standards where:

  • The SMSF or trust deed or other document requires the preparation of financial statements that comply with AAS, and
  • The SMSF or trust deed is created or varied in any way on or after 1 July 2021.

Many SMSF and trust deeds that were in existence as of 1 July 2021 expressly require trustees to prepare financial statements in accordance with the AAS. Where an SMSF or trust deed is varied after 30 June 2021, the changed AAS will apply. A trustee seeking to vary the terms of a trust should also consider if a variation is needed to the terms relating to preparation of financial statements.


Unfortunately, we are finding there are a number of document suppliers that do not appear to be aware of this change and could be placing accountants and advisers under an obligation to prepare general purpose financial statements.

General purpose v special purpose financial statements

Most SMSFs and trusts maintained by families and small businesses prepare special purpose financial statements as these are much simpler, less costly to prepare and minimise the information being disclosed.

In contrast, general purpose financial statements are more complex, technical, costly and may require more experienced and senior accountants to prepare. This could add significant complexity and costs each financial year.

What does the SMSF or trust deed provide?

Many SMSF and trust deeds supplied today still require compliance with AAS. Further, many trustees and their advisers may not even be aware of this requirement and could be acting in breach of the relevant deed if special purpose financial statements are being prepared.

One of the most fundamental duties of a trustee is to be familiar with and comply with the trust deed (refer to FCT v Bamford; Bamford v FCT [2010] HCA 10 and Commissioner of Taxation v Interhealth Energies Pty Ltd as Trustee of the Interhealth Superannuation Fund [2012] FCA 120). Advisers are under this same obligation.

While an SMSF or trust established prior to 1 July 2021 will not necessarily be caught by the change, many trusts undergo subsequent amendments for various other reasons and via various ways, e.g., via a deed of variation, trustee resolutions or by some other instrument (e.g., an SMSF to update for regulatory and tax changes and for trusts to update to allow for income streaming).

Once the terms of the deed are varied in any way after 1 July 2021, the changed AAS automatically applies to the trust. To avoid this, a variation should also include appropriate wording relating to preparing financial statements.

Ideally, an SMSF or trust deed should expressly provide, among other things, that a trustee is not required to comply with AAS. Naturally, DBA Lawyers’ deeds are appropriately drafted with this in mind.

DBA Lawyers’ deed of variation to exclude AAS

We offer, among other deeds, a specific deed to exclude the AAS and any requirement to prepare general purpose financial statements for any trust or SMSF. The price of this service starts from $440.


A trustee has a duty to know the terms of the deed and administer the SMSF or trust in accordance with those terms. If care is not taken when obtaining a new trust or varying the terms of a trust, onerous and costly accounting obligations can arise. We can prepare a deed of variation to exclude these obligations.

An SMSF or trust can have a very long lifespan (typically up to 80+ years), so quality documents should be a priority. DBA Lawyers is committed to providing quality documents, excellent service and keeping our documents up to date with legal and practical changes. Most importantly our documents are prepared and signed-off by a lawyer.

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This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.

Note: DBA Lawyers hold SMSF CPD training throughout the year. For more details or to register, visit www.dbanetwork.com.au or call 03 9092 9400.

For more information regarding how DBA Lawyers can assist in your SMSF practice, visit www.dbalawyers.com.au.

By Shaun Backhaus, lawyer (This email address is being protected from spambots. You need JavaScript enabled to view it.) and Daniel Butler, director (This email address is being protected from spambots. You need JavaScript enabled to view it.).

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