Mr Smith says retrieving some of the data that needs to be collected real time to comply with the ATO’s plans for real-time reporting requirements could be difficult for certain types of assets.
“Real-time reporting is not as simple as people might think. For example, you might value a share every day, but you don’t value a piece of property every day, so some of these things are not as easy to deal with on a real-time basis,” he told SMSF Adviser.
“You might only be striking a valuation on some particular assets on an annual or semi-annual basis, so that in itself will be one of the limiting factors on how this can be taken.”
While a lot of data is already delivered on a real-time basis, asset valuation starts to become an issue when you implement a requirement for real-time member statements.
“Without having all of the assets valued appropriately, you could actually be providing misleading information on a real-time basis. [This is] dangerous and could be misleading,” Mr Smith said.
“So one has to be very careful about what data is actually being delivered on a real-time basis.”
However, Mr Smith said real-time reporting that reveals changes in pensions account balances and when people are making payments will be essential with the new regulations.
“So you can understand why the government wants to stay on top of that to ensure that things don’t go off the rails, but beyond those transactional things, it gets more difficult because of this valuation issue that will rear its ugly head at some point if people are not careful,” he said.
Mr Smith said he does not expect the requirements will have significant impacts on accounting firms but expects that administration platforms will need major changes.
“The admin platform providers will have to do all the hard yards and will have to amend their systems, to be able to deal with this stuff, and that’s always a challenge for them.”
It’s a whole lot of expensive bother for no tangible return particularly for SMSFs. And like Wondering says – the ATO can’t even cope with their website. How on earth are they going to cope with this. What a joke. What exactly does the ATO envisage going off the rails? The industry is a smoothly running express train, not a runaway steam engine plunging off an unfinished bridge.
It’s not just properties that cause valuation issues either – many managed funds and unlisted public companies don’t have readily available valuation data either and can take months to respond to queries if they bother to respond at all.
I agree. I don’t see the necessity for it, nor the perceived benefits of real-time reporting in this space. Not quite sure what they hope to achieve, other than yet another level of bureaucracy to make everybody’s life more difficult.
Challenging for the administration platforms. Certainly. For the ATO based on recent experiences shown by the ATO and their IT ability, I would have thought it a much greater challenge for the ATO than the business community. After all in future years everyone is going to be relying on what the ATO data says when clients change platforms and advisers, as the PI risk on all of this is just out of this world. The question the government and everybody should be asking is how are the ATO going to cope with real time reporting when it cannot even cope with the historical delayed reporting it currently does. Further how is the community going to cope when the ATO says, sorry just be patient with us while we get our systems in order, as it is currently doing to Tax Agents still months after their systems crashed several times. That is going to be interesting and the real question that needs answering. I for one am not interested in real time reporting until the ATO can guarantee to me that they can not only cope with real time reporting, but can also report back to us in real time as well.