An education director has warned the SMSF sector may yet have strict deadlines stipulating the date by which a fund’s financial statements must be prepared imposed upon it as the perceived flaw in the legislation regarding this issue is yet to be resolved.
“There is a possibility they may reconsider a proposal like [having to prepare an SMSF’s financial statements 45 days prior to the lodgement of the fund’s annual return],” SMSF Association deputy chief executive and policy and education director Peter Burgess said during a recent industry roundtable.
“I think [Treasury has] concerns that the provision in the legislation that requires financial statements to be prepared doesn’t stipulate a date when they have to be prepared [by].
“They [also] seem to be concerned about auditors perhaps not being given enough time to audit financial statements – there are situations where the auditor may receive those statements just a few days before the fund is due to lodge its return. They seem to be the main drivers behind this change.”
On a positive note, Burgess said should the proposal be raised once more he is confident the industry will be consulted before any legislation on the matter is enacted, unlike the last time.
However, he was very clear on the SMSF Association’s stance toward the subject.
“We actually don’t support it. We think that there is a process in place at the minute if they’re worried about not being [given] enough time [to audit the financial statements of the fund],” he noted.
“SMSF trustees can always request an extension so there’s that mechanism already there. And in relation to deadlines, while it is true there is no statutory deadline for financial statements to be prepared, there is a statutory deadline for the SMSF annual return and you can’t [lodge] that annual return unless you have [completed] your financial statements.
“So I’m not sure it’s necessary to have a statutory deadline for the completion of financial statements.”
The proposal to mandate SMSF financial statements be prepared 45 days prior to the lodgement of a fund’s annual return was introduced and then dropped in the final months of 2020.''